Sugar Production in Ukraine Decreases by 26% Due to Trade Restrictions with the EU

According to the Ukrainian Agribusiness Club (UAC), Ukraine is planning to produce 1.3 million tons of sugar in the 2025/26 marketing year, which represents a substantial decrease of 26.3% compared to the previous season. This alarming trend highlights the impact of ongoing trade restrictions imposed by the European Union (EU) and challenges faced by farmers in accessing third markets.

In a survey published on Friday, UAC revealed that farmers have reduced their planting areas to 199,000 hectares, a decline of 21.6%. The significant reduction in acreage is primarily attributed to the reintroduction of tariff quotas by the EU in 2025, which replaced the full liberalization measures (ATM) that were implemented following Russia's full-scale invasion of Ukraine in 2022.

Despite these setbacks, favorable weather conditions have led to a slight increase in sugar beet yields, which reached 49.3 tons per hectare. This figure is 2% higher than the previous season and 4.4% above the average yield over the past five years, providing a glimmer of hope amidst the overall decline in production.

Export forecasts for sugar indicate a reduction to 505,000 tons in the 2025/26 marketing year, down from 629,000 tons previously, according to UAC. The organization noted a shift in market dynamics, with the EU's share of Ukrainian sugar exports decreasing to 17% in the 2024/25 period, while Africa and the Middle East accounted for 32% and 29% respectively.

Domestic sugar consumption is also expected to decline from 1.1 million tons to 0.9 million tons in the 2025/26 marketing year. However, high yields and an estimated 620,000 tons in reserves are anticipated to meet local demand, allowing for continued exports to traditional markets, UAC stated.

The current decrease in production follows a remarkable peak in 2024, when Ukrainian sugar exports reached their highest volume since 1997, generating an impressive $419 million. This record was fueled by soaring global sugar prices, which averaged 510 euros ($590) per ton, alongside the stable operation of Ukraine's maritime ports.

Changes in export trends have emerged following the expiration of trade preferences. While the EU absorbed 77% of Ukrainian sugar exports at the beginning of 2022, the new trading conditions have compelled Ukrainian producers to seek alternative markets for their products. This shift underscores the ongoing challenges faced by the agricultural sector in Ukraine as it navigates a complex landscape of international trade and domestic production.