Sugar industry is 'shaky'

Moldovan sugar beet producers are worried about this year’s output. Alexandru Slusari, head of the National Employers’ Association in Agriculture and Food Industry, told Info-Prim Neo that nobody knows what the consequences of the weather, or State policies, could be. “At first, the sowing conditions were optimal. Afterwards there were rains, but in May and, especially June, there was mostly hot weather that has affected the sugar beet plantations”, said Alexandru Slusari. The rains in the last few days ameliorated the situation slightly, yet the rainfall was uneven. There were torrid temperatures, and then there were heavy rains. “If we have some rainfall in August, then we can still hope for some decent crops”, said Alexandru Slusari. Cultivated surfaces increased from 23,000 to 30,000 hectares. “The worst fact is that Ukrainian sugar is imported almost without any barriers. There is a lot of sugar on the Ukrainian market, whereas Russia does import cane sugar, and the EU is very strict towards Ukrainian sugar. Ukraine is left to sell it on the internal market and to us, through contraband via the Transnistrian border, which we cannot control”, said Alexandru Slusari. Slusari claims that if the VAT did not jump to 20% the situation would’ve been “gentler” to the farmers. “Now there are two solutions: we either increase the price for sugar, or decrease the one for beets. If the sugar price rises, the already-flourishing contraband will increase even more. The local sugar is drawn out of the competition, since there also is possibility to legally import sugar from canes. The 8% VAT was the last barrier for the latter”, said Alexandru Slusari. We are left with the second option: decrease the beet price, but then people would quit growing beets. The cultivated surfaces will shrink fast in the following years. Those who plant beets would not able to cover production expenses. Alexandru Slusari predicts several scenarios: beets will become more expensive, the sugar will follow, and ultimately Ukrainian sugar import will be legalized. Local processors will see that it is inconvenient to sell sugar in Moldova, and will start exporting it. If import of the cheaper cane sugar is legalized, processors will realize that there is no use in growing beets and it will be less and less cultivated in Moldova.