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Market Participants: Foreign investors entering Ukrainian sugar market

Investors from Arab countries, Europe and Russia perform particular interest in purchasing Ukrainian sugar companies – says executive director of one of the leading company.

Russian investors will accelerate in the nearest future, if customs duty on imports of Ukrainian sugar is suspended. Currently Russia is considering upon acceptance of quota for customs-free importation of 300 tons of beet sugar. In case of positive decision it makes sense to buy manufacturing facilities in Ukraine.

Europeans are already investing in the Ukrainian sugar sector as well. This autumn 2009 the company world's leading providers of sugar, ED & F Man (GB) ED & F Man increased its share by 24.99% of “Ukrainian Sugar Company” LLC. As a result, ED & F Man has become a 100% owner of the enterprise and Zasillia Sugar Mill (Mykolayiv region). Conclusion of the deal will let renew a Ukrainian project of ED & F Man.

Interest of foreign investors in Ukrainian sugar market is quite logical. For Arabic countries and Russia Ukraine is associated with further delivery of sugar to their homeland. At the same time, Europe presence in Ukraine gives them an opportunity to expand geography of sales.

Moreover, recent situation in Ukraine plays in favor of producers. Existing deficit of raw material on the market results to the appreciation of sugar. This year the price for the product in retail outlets has increased almost twice - up to 7.5 UAH/ per kilo (approximately 0.9 USD/ per kilo). Limited supply related with decline in domestic production over the past two years. Thus, in 2008 its production decreased by 15.4% - to 1.57 million tons, and in 2009 - by 19.3%, to 1.27 million tones.


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