Ukraine Sugar Sector 2025/26 – Outlook Darkens as EU Access Shrinks

Ukraine Sugar Sector 2025/26 – Outlook Darkens as EU Access Shrinks

Executive Summary:

Ukraine’s sugar sector is facing shrinking production, weak domestic demand, and uncertain EU trade access for the 2025/26 marketing year (MY). A sharp 17% drop in sugar production is forecast, largely driven by reduced planted area and fears over the EU export regime post-June 2025. Without weather support, the sector may struggle to maintain profitability, especially with domestic consumption steadily falling and competition intensifying on global markets.

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📉 Production Forecast: Down Sharply

• MY2025/26 sugar production is forecast at 1.5 million metric tons (MMT) – down 17% from the prior year.
• Sugar beet planted area has dropped from 254,000 ha to 220,000 ha, driven by fears over reduced access to the EU and declining domestic profitability.
• The sugar beet crop is entirely processed domestically, but the tight clustering of production around processing plants limits flexibility.
• The top 3 producers (Radekhivsky Sugar, Astarta-Kyiv, Ukrprominvest-Agro) control over 60% of the national sugar output.

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🌱 Crop & Climate Conditions

• Sugar beet yields are under pressure due to average NDVI levels in spring 2025.
• While early-season weather was stable, soil moisture will be critical from June to August.
• Fewer sugar beet seeds were imported in spring 2025 – nearly zero in April, showing reduced farmer interest.

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🧃 Domestic Consumption: Structural Decline

• Domestic sugar consumption is falling due to:
  • Population loss (17% have fled the country).
  • Shift to high-intensity sweeteners (import growth >30% in MY2023/24).
  • Changing consumer habits: fewer homemade jams and sweetened milk products.
• Per capita consumption has fallen 26% over the past decade.

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🚛 Export Outlook: EU Role Diminishes

• Sugar exports reached 730,000 MT in MY2024/25, mostly to non-EU markets.
• For MY2025/26, exports are forecast at 700,000 MT, with only 109,000 MT allowed into the EU due to the “emergency brake” safeguard.
• Ukraine is actively shifting to the Middle East, Africa, and Asia via the Black Sea and Danube ports.
• The EU’s share in Ukrainian sugar exports is falling fast (see Figure 7, p.11).

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💰 Price Trends & Policy

• Ukrainian wholesale sugar prices have fallen in line with EU prices since early 2024.
• Retail prices remain elevated due to logistics and packaging.
• The MY2025/26 ending stocks are expected to decrease slightly due to reduced production and stable exports.

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🧾 Policy Environment

• Ukraine maintains:
  • 50% import duty on sugar.
  • 260,000 MT annual TRQ on raw cane sugar imports.
  • Export quota to the EU of 109,000 MT for CY2025, divided among 21 producers.
• The EU emergency brake on sugar imports remains active and capped at recent average import volumes.
• No clarity yet on the EU trade regime after June 2025, which adds risk to planting decisions.

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📌 Key Takeaways & Outlook

Factor	Status
Sugar Production	↓ 17% (to 1.5 MMT)
Sugar Beet Area	↓ to 220,000 ha
Domestic Consumption	↓ structural, sweeteners rising
EU Export Quota	Capped at 109,000 MT
Global Competition	↑ especially in MENA and Africa
Weather Risk	Neutral to slightly bearish

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📊 Conclusion & Strategic View

Ukraine’s sugar sector is contracting, not only due to war but also due to market and structural shifts.
Export reliance is growing, but the EU market is no longer reliable.
Producers must now pivot to cost-efficiency, premium certification (organic/kosher), and flexible logistics to stay competitive.

📉 Price support can only come from:

• A sharp weather event (drought),
• A surprise reversal in EU trade policy, or
• A global sugar rally – none of which are guaranteed.

*Summary of the USDA report on sugar prepared by Denys Sobolev and approved by Megan Francic.