European Commission proposes banning EU duty-free sugar imports to protect manufacturers

MOSCOW. Jan 28 (Interfax) - The European Commission has proposed temporary suspension of the Inward Processing Relief (IPR), a designated duty-free sugar imports system, to protect EU sugar manufacturers affected by falling prices and tighter competition, Ukrainian media said, citing the Ukrsugar association of sugar producers.

European Agriculture and Food Commissioner Christophe Hansen made the proposition, without clarifying when exactly the decision might take effect, the association said.

"The decision hailed by European associations of sugar and sugar beet producers has caused the opposite reaction of European sugar refineries, which believe it will lead to an increase in the cost price of their products and a decline in their global competitiveness," Ukrsugar said.

According to the association, raw sugar imports under IPR licenses grew 19% to 587,000 tonnes in 2024-2025, and sugar from Brazil accounted for 95% of those amounts. White sugar imports under IPR licenses grew 5% to 155,000 tonnes, with 43% coming from Brazil.

European industry associations (CIBE and CEFS) described the Hansen initiative as a resolute step towards dealing with the critical situation on the market, where prices are artificially reduced by dumping and subsidies of major global exporters. Besides limits on the IPR system, manufacturers supported the European Commission's decision to exclude sugar from the trade deal with India. This is crucial, as the WTO has dubbed India as a country providing illegal export subsidies, which destabilize the global and European markets.

The European Commission action should also be a positive message for Ukraine, considering that restrictions on uncontrolled imports from Brazil and India ease the excessive pressure on the EU market. This creates better conditions for selling Ukrainian products within the limits of the preferences and protects the market share assigned for European and neighboring stable suppliers from unfair competition of third countries. Still, it is unclear yet whether the ban will apply to Ukrainian sugar among others. Some European media outlets reported that Morocco, Egypt and Ukraine follow Brazil among leading sugar suppliers to the EU.

European Commission data indicates that EU imports of unrefined sugar under the IPR system amounted to 587,000 metric tonnes in the marketing year 2024-2025, 19% more than in the previous year, with 95% of this amount coming from Brazil.

The data says that white sugar imports under the IPR system stood at 155,000 tonnes in 2024-2025, up 5% from the previous year, with Brazil accounting for 43%, followed by Morocco, Egypt, and Ukraine.

The volume of duty-free Ukrainian sugar exports to the EU in 2026 is limited to a quota of 100,000 tonnes, which the Ministry of Economy, Environment, and Agriculture has distributed among 16 key producers based on their output. This quota significantly exceeds pre-crisis limits, but it is part of the agreed-upon protective measures to stabilize the internal European market amid oversupply.

Exporting to EU members beyond this limit becomes economically unprofitable due to the imposition of standard import duties. For white sugar, this duty is 419 euros per tonne, and for raw sugar, it is 339 euros per tonne, effectively doubling the cost of the product and making it uncompetitive compared to EU domestic prices.