The effects of sugar imports
The effects of sugar imports from Ukraine on markets and stakeholders in the EU
Study prepared for the InfoZentrum Zuckerverwender (IZZ) by Stephan von Cramon-Taubadel (University of Göttingen)and Oleg Nivievskyi (Free University of Berlin)
In 2016 the EU granted Ukraine trade preferences in the form of tariff rate quotas (TRQs) for agricul- tural products including sugar under the Deep and Comprehensive Free Trade Agreement. In June 2022 in response to Russia’s attack on Ukraine, the EU extended these preferences to full liberalisation of sugar trade under the so-called Autonomous Trade Measures (ATMs).
Prior to 2022, EU imports of sugar from Ukraine were sporadic and never amounted to more than 11% of total EU imports in any given month. However, in late 2022 in response to the ATMs, EU imports of white sugar from Ukraine increased, and by late 2023 and early 2024 Ukraine was supplying over 50% of the EU’s monthly sugar imports.
In July 2024, in response to pressure from domestic sugar producers and refiners, the EU revised the ATMs to reintroduce TRQs for sugar from Ukraine. The revised ATMs allow Ukraine to export 109,439 tonnes of sugar to the EU between January 1 and June 5, 2025. This is considerably less than the roughly 407,000 and 510,000 tonnes of sugar that the imported from Ukraine in 2022/23 and 2023/24, respectively.
Some argue that the EU was ‘flooded’ by imports of sugar from Ukraine. This is not the case. EU imports increased by roughly 1.1 million tonnes (from 1.497 to 2.575 million tonnes) between 2021/22 and 2022/23, but over the same period EU production fell by over 2 million tonnes, and domestic sugar prices increased to over $800/tonne. Hence, imports from Ukraine in 2022/23 helped to relieve a do- mestic shortage – they did not flood the EU market.
Ukraine continued to export to the EU in 2023/24, and its share of EU sugar imports increased. Never- theless, the total volume of EU sugar imports fell strongly, from 2.575 million tonnes in 2022/23 to 1.6 million tonnes in 2023/24, while sugar prices remained high. Imports of sugar from Ukraine may have displaced imports from other sources, but they did not lead to over-supply and declining prices.
No doubt many sugar producers and refiners in the EU would have preferred even higher prices. And some refiners would have preferred to import and process raw sugar from other countries, and to forego white sugar from Ukraine altogether. However, the interests of consumers and users of sugar in the EU also bear consideration. White sugar imports from Ukraine fostered competition and the contestability of sugar markets in the EU.
In recent years the EU has been an annual net exporter of roughly 1.6 million tonnes sugar in processed form. For some branches of the food processing industry, such as confectionary and the production of preserves, sugar is a major cost component. The competitiveness of firms in these branches depends on reasonably-priced and reliable supplies of sugar. As demonstrated in 2022/23 and 2023/24, Ukrain- ian sugar can make a significant contribution to ensuring the availability of such supplies.
Under current conditions, agriculture in general and sugar in particular is one of the few areas in which Ukraine can generate value added and earn export revenue. In the longer run, rebuilding Ukrainian agriculture in the aftermath of war and on its path towards eventual EU accession will represent a huge opportunity for agribusiness and other sectors in the EU. However, economic integration is a two-way street. In return Ukraine must be allowed to develop those sectors of its economy, such as agriculture, in which it has a comparative advantage.