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Sugar industry suffers losses from rise in gas prices, asks govt to introduce subsidy of UAH 150/tonne of grown raw materials
KYIV. Oct 4 (Interfax-Ukraine) – The Ukrainian sugar industry, which is on the verge of unprofitability, will incur additional losses due to the rise in prices for natural gas from UAH 11,000 per 1,000 cubic meters in July up to UAH 28,000 per 1,000 cubic meters in October, the business community asks the Prime Minister to provide subsidies for sugar producers in the 2022 state budget in the amount of UAH 150 per tonne of raw materials sold.
This is stated in an open letter from the Ukrtsukor association, the Ukrainian League of Industrialists and Entrepreneurs and the Council of Entrepreneurs under the Cabinet of Ministers to head of government Denys Shmyhal, published on Monday.
"Sugar producers are on the verge of unprofitability. Farmers spend more than UAH 42,000 per hectare of sugar beet sowing. With an average yield of 48 tonnes per ha and a price of UAH 1,200 per tonne of beets, their cultivation is unprofitable," the open letter says.
According to the business community, the rise in price for natural gas in some regions from UAH 11,000 per 1,000 cubic meters in July up to UAH 28,000 per 1,000 cubic meters in October will not allow a part of agricultural producers to start the sugar-making season, and entrepreneurs who have invested in sugar production will incur significant losses.
The authors of the letter called on the government to jointly find opportunities to reduce the price for natural gas, which is exorbitant for many industries, and to introduce subsidies to sugar producers from the state budget in 2022. According to them, such a measure will stop the reduction in the area of sugar beet crops (currently 206,000 hectares) and ensure the break-even operation of sugar factories.
"The business community asks officials to provide subsidies for sugar producers in the amount of UAH 150 per tonne in the 2022 state budget. The amount will be calculated in proportion to the volume of raw materials sold. Such a program will allow agricultural enterprises not only to increase the area under sugar beet, but also bring producers out of the shadows, block tolling schemes," the open letter says.
