(Interfax) Russia is dragging its feet over finalizing a sugar import deal with Ukraine worth millions to Ukrainian producers, an agricultural market expert said on Friday. The deal, agreed between the two countries last year, will see Ukraine supply a quota of 600,000 tons of sugar to Russia tax free. However, Russia has not yet named the Ukrainian companies who will be granted the rights to import the sugar into Russia, the expert said. He said this was harming the interests of potential Ukrainian exports, since they cannot choose suppliers until they receive import contracts from Russia. The need to obtain licenses from the Foreign trade Ministry will also hold up the process, he said.
As a result, Ukraine will not be able to start supplying sugar for this year's quota to Russia until May at the earliest, putting the country far behind its supply schedule. According to its agreement with Russia, Ukraine is to have sent 100,000 tons of sugar to Russia in the first quarter. A further 400,000 tons are to be supplied over the second and third quarters, and the remaining 100,000 tons in the fourth quarter.
In recent months, worries have surfaced that Ukraine may not be able to produce enough sugar to meet its agreement with Russia.
Ukraine's sugar output in 1997 was 2 million tons. Sugar beet was harvested from around 1 million hectares of land, and sugar processing plants refined 17 million tons of sugar beets. The internal market for sugar in Ukraine consumes 1.5 million tons.
The government has forecast 1998 sugar output at 3 million tons, but industry experts have questioned the country's ability to produce enough sugar to meet both domestic demand and export. According to some expert estimates, Ukraine may have to import up to 400,000 tons of unrefined sugar to meet its export commitments with Russia and its internal demand.
