22 Jan 2024 09:42

Polish producers demand quotas on Ukrainian sugar

MOSCOW. Jan 22 (Interfax) - Poland's National Association of Sugar Beet Growers (KZPBC) is demanding the imposition of quotas on Ukrainian sugar and intends to join the national farmers' protest scheduled for January 24, Ukrainian media reported citing a statement on the association's website.

"After the introduction of the autonomous trade measures, unrestricted imports of sugar from Ukraine into the EU increased by 20 times in the 2022/2023 agricultural year and in the 2023/2024 season these amounts could be up to 35 times higher than in the previous one, when quotas set in the EU-Ukraine association agreement were eliminated," the association said.

The possible expansion of crop areas and sugar production in Ukraine by about 20% in the 2024/2025 agricultural year could increase the country's export potential to more than 1 million tonnes, the KZPBC said.

"The scale of the import increase is disproportionately large compared to possibilities to use the additional sugar, distorts competition and destabilizes the market of the community. The sugar sector cannot deal with the unprecedented growth of imports and function stably in the short-term and medium-term future," the association said.

It estimated that Ukraine's export potential surged 16-fold after the introduction of the autonomous trade measures.

Maintaining the status quo in trade relations with Ukraine is unacceptable for Polish sugar beet growers, as the interests of both parties must be observed and this is not currently the case, the association said.

The KZPBC called on the European Commission to introduce mechanisms that would make it possible to effectively safeguard the markets of EU countries from further growth of Ukrainian sugar imports and negative consequences for the profitability of agricultural production and the operation of farms in Poland.

The Ukrainian parliament's Committee for Agrarian and Land Policy said earlier that Ukraine might expand its sugar beet crop area by 10%-20% in 2024 and increase sugar production to 2 million tonnes, which would be an 11% increase on the previous year. Ukraine already produces about 1.8 million tonnes of sugar, while domestic consumption amounts to only 900,000 tonnes, according to committee data.

Despite difficult conditions, Ukraine is actively exporting sugar to the EU and will continue to do so next season "in order to cover the deficit on the markets of some European Union countries," the committee said. Furthermore, there is demand for Ukrainian sugar on the world market, "where, according to experts' forecasts, the deficit of this product will increase," it said.

Polish Agriculture Minister Czeslaw Siekierski said last week that, despite the protests of European countries neighboring Ukraine, the EC is preparing a draft resolution to extend the duty-free regime for Ukrainian exports until the middle of 2025.

The negative impact of imports from Ukraine is becoming increasingly evident not just in Eastern European countries, but also in Western Europe and concerns an increasingly broader range of goods, not just grain, he said. France, Austria and Germany are saying there is a threat to the grain, poultry, fruit and sugar markets, and that it is necessary to reinstate tariff quotas that have been suspended under EU rules. Poland supports these demands and has asked the EC to reinstate tariff quotas for some sensitive commodities, but this was rebuffed by the EC, the minister said.

Poland wants to work out a way to safeguard against the negative consequences of agricultural imports from Ukraine that is acceptable to all EU members, Siekierski said. It is analysing and conducting internal consultations, including on the mechanism of licensing exports of agricultural products to Poland that was proposed by Ukraine, he said.

The Polish Agriculture Ministry said Poland will maintain its embargo on imports of Ukrainian agricultural products until the EU works out effective mechanisms that will protect the country's domestic market.

The free trade regime with the EU that was introduced for Ukraine in 2022 and expires in June 2024 has led to lower-priced Ukrainian food goods flooding the markets of neighboring Hungary, Slovakia, Poland, Bulgaria and Romania given that much of Ukraine's agricultural exports have been redirected to Europe. This has triggered protests by local farmers.

Under pressure from these countries, the EC was forced to adopt special measures in May to temporarily prohibit imports of Ukrainian food goods, specifically wheat, rapeseed, sunflower seeds and corn, into these countries. After the ban expired in mid-September, Hungary, Slovakia and Poland imposed bans at the national level over EC objections. Furthermore, Poland expanded the import ban to include rapeseed meal and cake, corn bran, wheat flour and derivative products, while Hungary expanded its list of banned Ukrainian imports to 24 items.

In response, Ukraine filed a complaint with the World Trade Organization. Proceedings in the WTO have now been suspended to allow for negotiations with the participation of the EC.