The Union of sugar producers and Association of sugar beet growers in the Republic of Moldova has applied to the government with a proposal to save the industry in conditions of Russia’s introduction of customs duties on sugar.

 

Chairman of the Union of sugar producers, speaker of the Sudzucker Moldova administration, Alexander Koss said that “from September 1, Russia withdraws a number of goods from the free trade regime with Moldova, including sugar, thereby dramatically lowering the prospects for sustained development of sugar-beet industry of the Republic of Moldova”.

 

“Despite the law entry into force, our companies began now to experience problems with Russia to import sugar. 5.7 thousand tons of sugar blocked by Rospotrebnadzor under the pretext of improper bags labeling. We are talking about the products at US$4 million (55 million lei), which we have to bring back”, said Koss.

 

In his words, “the export potential in 2014 could exceed 1 billion lei, as was planned to collect about 1.2 million tons of sugar beet and produce 170 thousand tons of sugar (143 million tons were made in the Republic of Moldova in 2013)”.

 

He noticed that another problem is Moldova’s domestic market size (60 thousand tons of sugar against 80-85 thousand tons in previous years).

 

A member of the union board, Octavian Armasu reported that the introduction of customs duties on sugar from Moldova makes it uncompetitive in Russia.

 

“The average wholesale price of Moldovan sugar now is 10.1 lei/kg or US$733/t. In Ukraine a ton of sugar worth US$761, in Romania is US$695, in Russia US$768, in Belarus US$796, and in Kazakhstan US$906. Standard duty on Moldovan sugar in Russia increases its cost at US$340”, he said.

 

In this regard, the sugar producers has proposed the government to hold negotiations with the EU about increasing quota for sugar exports to the level of compensating the loss of preferential Russian market, to continue the dialog with Russia on liberalization of Moldovan sugar supplies, to declare a moratorium on any changes in the framework conditions, such as customs duty, import regulations, 8% VAT on sugar that will keep the internal sugar market.

 

In addition, representatives of the sugar industry are opposed to the assumptions of imports of raw cane sugar in Moldova, without paying customs duties, regardless of the mode of entry, as well as for the increase of subsidizing the industry by increasing the size of compensation for farmers at insurance of sugar beet fields from agro risks, subsidies for the agricultural machinery, in particular irrigation systems.