According to Ukrainian News, the Ministry of Ukraine has endorsed import quotas on raw cane sugar in the amount of 263 thsd mt for 2009 and 267 thsd mt for 2010.
The Ministry amended article 1 of the law on tariff import quotas for raw cane sugar. The quota for 2008 of 260 thsd mt has also been confirmed.
Earlier in July, the Ministry of Economy initiated the introduction of import quotas on raw cane sugar at the level of 263.9 thsd mt for 2009 and 267.8 thsd mt for 2010,
with a customs duty of 2%.
In May 2008, Ukraine became a member of the World Trade Organization (WTO). In compliance with WTO agreements, Australia required 263 thsd mt of raw cane sugar
annually to be allowed for import to Ukraine and taxed at 2% of its declared customs value. Imports in excess of the quota levels are to be taxed at 50% tax. We
estimate that the final cost of sugar made from imported raw cane, after having been subject to a 50% tax rate, will cost 20-30% more than sugar made from sugar
beets. This would, of course,make the import of raw cane in excess of quotas inefficient.
Moreover, Ukraine is currently facing a possible sugar deficit. The country is going to produce 1.6-1.7 mln mt of sugar in the 2008/09 marketing year. Taking into
account the country’s annual sugar consumption of approximately 2.0-2.2 mln mt and sugar from national reserves, Ukraine will experience a deficiency of 0.58-0.6 mln
mt of sugar. With the help of Australian raw cane sugar, the country will be able to cover the sugar shortage.
Our view: In May 2008, Ukraine became a member of the World Trade Organization (WTO). In compliance with WTO agreements, Australia required 263 thsd mt of raw cane sugar annually to be allowed for import to Ukraine and taxed at 2% of its declared customs value. Imports in excess of the quota levels are to be taxed at 50% tax. We estimate that the final cost of sugar made from imported raw cane, after having been subject to a 50% tax rate, will cost 20-30% more than sugar made from sugar beets. This would, of course,make the import of raw cane in excess of quotas inefficient.
Moreover, Ukraine is currently facing a possible sugar deficit. The country is going to produce 1.6-1.7 mln mt of sugar in the 2008/09 marketing year. Taking into account the country's annual sugar consumption of approximately 2.0-2.2 mln mt and sugar from national reserves, Ukraine will experience a deficiency of 0.58-0.6 mln mt of sugar. With the help of Australian raw cane sugar, the country will be able to cover the sugar shortage.