War, gas prices to halt a third of Ukraine's sugar refineries

KYIV (Reuters) – A third of Ukraine's refineries will not operate in the coming sugar production year due to war and high gas prices, producers' union Ukrtsukor said on Tuesday.

Ukraine produced 5 million tonnes of beet sugar in Soviet times, but production fell to 1 million tonnes due to lower demand, rising fuel prices and competition in export markets from cheaper cane sugar.

European gas prices have reached $2,000 per 1,000 cubic metres and this is the main reason why 10 of 32 sugar refineries will not start up when the new production year begins on Sept 1, the union said.

Fighting in the northern, southern and eastern regions of Ukraine has reduced the acreage planted with beets and other major crops, and the grain harvest is expected to fall to about 50 million tonnes from a record 86 million in 2021.

The agriculture ministry has said farmers sowed 180,400 hectares to sugar beet this year allowing for the production of 1.08 million tonnes of sugar from 7.83 million tonnes of sugar beet.

Ukraine produced around 1.3 million tonnes of beet sugar in 2021.

Ukraine will have in stock around 470,000 tonnes at the start of 2022/23 sugar production season on Sept 1 and this, together with expected production, will cover both local needs and exports, the ministry said.

(Reporting by Pavel Polityuk; editing by Jason Neely)

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