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Where there is no law, but every man does what is right in his own eyes, there is the least of real liberty
Henry M. Robert

Special Sugar Duty Canceled

23 February, 1999 - 00:00

But this won't help Ukrainian exporters

By Oleksandr PALIY, The Day
The Russian government canceled the temporary customs duty on sugar imports
last Monday, reports Interfax Ukraine. This move is meant to prevent white
sugar shortages on the market after most exporters deserted it.

Russia enforced a 20% customs duty on white sugar last August to stimulate
domestic production. This allowed Russia to increase sugar output by almost
one million tons in 1998 over the previous year. Naturally, this enactment
made Ukrainian sugar manufacture drop by about as much, so that experts
started talking about the "clinical death" of the Ukrainian sugar industry.

At present, Ukraine cannot meet even the 600,000 ton sugar export quota
established after difficult talks in Moscow. In addition, the Russian sugar
lobby came up with a project to increase the import duty from 25% to 30%,
along with a new seasonal duty of 45%. According to the Russian Sugar Producers'
Union, Russia's "interested agencies" are finishing work on an appropriate
draft Cabinet resolution.

ECONOMY DESK'S COMMENTARY

Russia's cancellation of the sugar duty does mean much to Ukraine, confirmed
Oleksandr Zayets, president of the Association of Sugar Industry Enterprises
and Organizations of Ukraine. Interviewed by The Day, he stated
that "We don't have much sugar for exports. We are not even using up the
quota (i.e., 600,000 tons - Ed.)." As for this year's harvest of
sugar beets, Mr. Zayets does not rule out the possibility that the sugar
duty will be reimposed. "So long as we don't have a joint structure like
an intergovernmental holding company, Russia will be guided by its interests
only. Today they have no sugar, so they cancel the duty. Tomorrow their
businessmen will bring enough raw sugar and they will levy the duty again."
When asked about the profitability of the Russian sugar market for Ukrainian
producers, he replied that at today's prices not more than one-third of
Ukrainian enterprises will be able to keep operating.

Vitaly KNIAZHANSKY, The Day

 

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