Opening the EU market to MERCOSUR will not benefit Ukrainian sugar producers but will not push them out of Europe — Kavushevska

Opening the European market to MERCOSUR countries offers no upside for Ukrainian sugar producers, as it creates direct competition. However, South American products will not displace Ukrainian sugar from Europe, said Yana Kavushevska, Head of the Ukrsugar Association.

“Over the past few years, Ukraine has been producing enough sugar to fully cover the EU’s import needs. Before the full-scale war, our quota was 20,000 tons; in 2026, we may be able to ship 100,000 tons to the European Union, and we still need to decide where to export another 600,000–700,000 tons that we will produce this year. If the quota were 200,000, 300,000 or 500,000 tons, we would sow more sugar beet and produce more sugar to secure the largest possible share of imports in the logistically close and premium EU market,” she said.

Ukrainian sugar has several advantages over Latin American sugar, the association head added. European companies find it convenient to purchase sugar from Ukraine due to flexible supply terms: they can choose any shipment size, any quality grade and any type of packaging, as well as receive deliveries quickly or schedule supplies for a specific period. By contrast, sugar from Brazil is shipped by sea in large consignments and is better suited to large consumers.

In addition, nearly half of the cost of growing sugar beet in Ukraine consists of European inputs, including seeds, crop protection products and specialized machinery. This generates revenue for EU companies, which are therefore interested in maintaining sugar trade with Ukraine. While Latin American raw sugar is also mostly refined at European refineries, generating income for EU businesses, the benefits of cooperation with Ukraine are still not comparable to doing business with another continent.

After the MERCOSUR agreement enters into force, Brazil will be able to supply 180,000 tons of sugar to the EU duty-free, Kavushevska added. Previously, Brazil’s quota stood at 363,000 tons, but imports within that quota were still subject to a duty of €98 per ton.

“Under the current price environment, this was a restraining factor. As a result, in 2024–2025, the EU imported only about 30,000 tons of Brazilian sugar annually. I believe that once the agreement is signed, the full 180,000-ton quota will be imported, increasing pressure on prices and competition with Ukrainian sugar,” Kavushevska said.

On Saturday, January 17, senior officials from the EU and the South American MERCOSUR bloc signed a free trade agreement in Paraguay, paving the way for the largest trade deal in the European Union’s history after 25 years of negotiations.