September 25 2002, 11:57 Interfax-Ukraine

Ukrainian association of sugar producers suggests introducing mortgage price for sugar

National association of sugar producers (NASP) Ukrtsukor has applied to government with a proposition to introduce mortgage price for sugar at the level of minimal price - UAH 2,370 ($444.5) per tonne - in order to stabilise prices for this commodity in the period of its seasonal overproduction. This was reported by NASP Head Mykola Yarchuk at the sitting of association's council.

He said since the start of the new sugarbeet processing season a sharp fall of wholesale prices for sugar had been observed. In particular, the prices fell from UAH2450-2550 ($459-478) per tonne in August down to UAH1900-2000 ($356-375) in current period.

Members of association think it necessary to take urgent measures for stabilisation of sugar prices to prevent losses of the industry's businesses. Yarchuk has said that in many regions prices for sugarbeet considerably exceed minimal one (UAH165-$31 per tonne), while sugar price is lower than minimal.

"If not to improve the situation, 60% of plants, operating in this season, will come out with losses," he said.

NASP Head thinks that by introducing mortgage prices the government will be able "to remove some 200,000 tonnes from the market."

At the same time, he thinks other measures suggested by government to stabilise price situation in the market (establishing intervention fund, sugar purchases into state reserve) cannot be realised within a short term and thus cannot help.

"If not to react now on the sharp price fall, we can expect an uncontrollable price surge in spring and summer period," he emphasised.

Besides that, M. Yarchuk requested management of sugar plants temporarily not to sell sugar.