Government Reduces Sugar Production Quota by 2.8%

According to Interfax, the Ukrainian government has called for a sugar production quota of 1,985 ths mt for September 2008 to August 2009, which 2.8% less than the current one. Olha Pankiv: The new quota implies 5% less sugar production than we expected for 2008/09 marketing year, and is likely to result in a more rapid evaporation of sugar stockpiles after overproduction in 2006/07 than we initially thought. We believe that resulting rise in sugar prices will benefit the sugar producers, including those traded Dakor (DAKOR: U/R), Astarta (AST PW: N/R) and Ukrros (UROS: N/R). However, the government does not have efficient mechanisms for enforcing the quota, so actual production may vary from that stated by the quota.