Agriculture Ministry Distributes Sugar Production Quota

According to Interfax, the Agriculture Ministry distributed 1.74 mln mt of a total of the 1.99 mln mt quota on sugar production between 104 domestic sugar plants. The quota is valid from September 1, 2008 to August 31, 2009. This marketing year’s (September 1, 2007 to August 31, 2008) quota is 2.04 mln mt. Olha Pankiv: The government distributed quotas for production of beet sugar; the remaining 245 ths mt will be made of raw cane sugar, imports of which are expected to start in 2009 as a result of Ukraine’s accession to the WTO. Five of the 109 mills active last year did not receive a production quota this time around. The news is positive for Astarta (AST PW: BUY), which received a quota of 128 ths mt, 42% more than in the 2007/08 season and Dakor (DAKOR: BUY), which got 78 ths mt, 17% higher than the previous season. Ukrros’ (UROS: BUY) quota decreased by 7% to 175.5 ths mt. We expect that similar to the last production season, players with their own supplies of beets will exceed the quota amount, while the rest will not be able to meet allocated amounts due to the feedstock deficit. Companies with high shares of in-house beets, such as Astarta and Dakor, are in the most beneficial positions.