The current wholesale price for sugar in Ukraine has dropped below the cost level, creating serious risks for producers. Despite the fall in cost, supermarkets are not rushing to adjust retail price tags.

If in August the average wholesale price was 22.99 UAH per kilogram, it has now decreased to 20 UAH. For comparison, last November sugar cost 23.63 UAH per kilogram.

“We expect the market to correct itself, as the current price is lower than the cost,” said Yana Kavushevska, Head of the National Association of Sugar Producers of Ukraine “Ukrsugar”.

She emphasized that selling products at such rates is critically dangerous for the entire industry. Moreover, sugar has been getting cheaper for the third consecutive year, which is confirmed by the October dynamics of the last three years.

For many factories, the current price means operating at a loss. That is why two enterprises decided not to start the sugar production season this year, because after recalculating the cost, taking into account the rise in gas prices and other factors, production proved unprofitable.

At the same time, the drop in wholesale prices does not guarantee a price reduction for consumers. Retail chains may keep the retail cost at the previous level, even when buying sugar cheaper, explaining this by increased logistics costs, more expensive storage due to blackouts, or other factors. Therefore, buyers may not experience the reduction in wholesale prices.