ProAgro Information Company UKRAINE: MOLASSES MARKET Market Research Kyiv, 2008
2 TABLE OF CONTENTS: INTRODUCTION... 4 GLOBAL MOLASSES MARKET... 5 Development Trends in Recent Years... 5 Main Production Regions... 6 World Trading... 7 Main Consumption Regions... 10 UKRAINIAN SUGAR MARKET: MAIN FIGURES AND BRIEF CHARACTERISTICS... 11 SUGAR BEET MARKET... 16 Sugar Beet Production... 16 General characteristics, development trends... 16 Dynamics, Indicators: Planted Area, Yield, Bulk Yield and Regional Structure... 17 Key Enterprises - Producers of Sugar Beet... 19 MOLASSES PRODUCTION... 20 Sugar Beet Processing... 20 General Characteristics... 20 Dynamics, Indicators: Volumes, Seasonality, Regional Structure... 21 Purchasing Prices and Pricing... 22 Molasses Production... 23 General Characteristics... 23 Dynamics, Indicators: Volumes, Seasonality, Regional Structure... 23 Key Sugar Beet Processers and Molasses Producers... 25 MOLASSES MARKET... 26 Market Supply of Molasses: Specific Features of Formation... 26 Prices and Pricing... 27 Main Areas of Use... 27 Alcohol Production... 27 Compound Feed Production... 28 Confectionary Production... 29 Yeast Production... 29 Citric Acid Production... 30 Production of Other Food Acids and Amino Acids... 31 Prospects of Molasses Use for Bioethanol Production... 32 Key Consumers, Consumption Volumes Evaluation... 39 Specific Characteristics of Molasses Logistics... 40 SUGAR HOLDING COMPANIES ON MOLASSES MARKET... 42 Brief Description... 42 Sugar Beet Processing and Molasses Production... 49 Trade Policy and Market Impact... 53
3 MOLASSES FOREIGN TRADE... 54 General Characteristics of Foreign Trade, Trends... 54 Exports... 54 Dynamics, Volumes, Prices, Geography... 54 Key Exporters... 56 Key Foreign Buyers... 57 Reasons for Molasses Imports Development... 58 Imports... 58 Dynamics, Volumes, Prices, Geography... 58 Key Importers... 59 Key Foreign Suppliers... 59 Reasons for Molasses Imports Development... 59 Specific Feature of Molasses Exports/Imports Logistics... 59 STATE REGULATION AND STANDARDIZATION... 60 Legislation... 60 Quality Requirements and Standardization... 61 State Standards... 61 Conformity of Ukrainian Molasses Quality with Foreign Buyers Requirements... 61 Molasses Certification, Main Certifying Bodies... 62 Customs Regulation... 63 Imports... 63 Exports... 65 STATISTICS... 67 APPENDIX... 81 LIST OF TABLES... 86 LIST OF DIAGRAMS AND FIGURES... 87
86 List of Tables Table 1. Global Molasses Market Potential in 2004-2008, mln t... 5 Table 2. Ukraine: Dynamics of Sugar Production in 2001-2007, mln t... 11 Table 3. Ukraine: Production of Sugar Beet in 1990-2007*... 17 Table 4. Ukraine: Structure of Agricultural Enterprises with Regard to Their Volumes of Manufacturing Sugar Beet in 2006... 19 Table 5. Ukraine: Largest Manufacturers of Sugar Beet in 2006... 19 Table 6. Ukraine: Capacity of Enterprises Processing Sugar Beet... 20 Table 7. Ukraine: Regional Structure of Sugar Beet Processing in 2006-2007... 21 Table 8. Ukraine: Minimal Purchasing Prices for Sugar Beet Set by Resolutions of the Cabinet of Ministers of Ukraine, UAH/t without VAT... 22 Table 9. Ukraine: Dynamics of Molasses Production in 2005-2007, thousand t... 23 Table 10. Ukraine: Leading Molasses Manufacturers in 2005-2007, thousand t... 26 Table 11. Ukraine: Average Prices for Sugar Beet Molasses in 2005-2007, UAH/t VAT included... 27 Table 12. System of Fodder Rations for High-Productive Cows That Includes High-Quality Grass Fodders and Compound Feeds (without root crops)... 28 Table 13. Concept of Introduction of Technologies for Ethanol Production in Ukraine... 33 Table 14. Concentration of Spirits for Increasing Octane Index of Gasoline per Unit, % weight... 33 Table 15. SWOT- Analysis of Development of Bioethanol Market in Ukraine with Regard to Molasses Processing... 36 Table 16. Ukraine: Ethyl Alcohol Production in 2002-2007, mln dekaliter... 39 Table 17. Ukraine: Yeast Production in 2005-2007, thousand t... 40 Table 18. Ukraine: Leading Yeast Manufacturers in 2005-2007, thousand t... 40 Table 19. Ukraine: Approximate Railroad Tariff for Delivery of Molasses to LLC Terminal- Ukrkharchozbutsyrovyna *... 42 Table 20. Ukraine: Structure of Sugar Industry (Sugar Holding Companies)... 42 Table 21. Ukraine: Sugar Beet Processing Capacities, Sugar Union «UkrRos» (as of 01.01.2007)... 44 Table 22. Ukraine: Sugar Beet Processing Capacities, UFC (на 01.01.2007)... 44 Table 23. Ukraine: Sugar Beet Processing Capacities, «Astarta-Kyiv» (as of 01.01.2007)... 45 Table 24. Ukraine: Sugar Beet Processing Capacities, «UkrPromInvest» (as of 01.01.2007)... 46 Table 25. Ukraine: Sugar Beet Processing Capacities, Evroservis-Ukrayina (as of 01.01.2007)... 47 Table 26. Ukraine: Sugar Beet Processing Capacities, «Dakor-Vest» (as of 01.01.2007)... 47 Table 27. Ukraine: Capacities for Sugar Beet Processing, Raiz-Tsukor (as of January 1, 2007)... 48 Table 28. Ukraine: Capacities for Sugar Beet Processing, «Intsukorprom-К» (as of 01.01.2007)... 49 Table 29. Ukraine: Sugar and Molasses Production, UFC... 51 Table 30. Ukraine: Sugar and Molasses Production, «UkrRos»... 51 Table 31. Ukraine: Sugar and Molasses Production, «Astarta-Kyiv»... 52 Table 32. Ukraine: Sugar and Molasses Production, «UkrPromInvest»... 52 Table 33. Ukraine: Sugar and Molasses Production, «Dakor-Vest»... 52 Table 34. Ukraine: Sugar and Molasses Production, «Intsukorprom-К»... 52 Table 35. Ukraine: Sugar and Molasses Production, «Yevroservis-Ukrayina»... 52 Table 36. Ukraine: Sugar and Molasses Production, «Raiz-tsukor»... 53
87 Table 37. Ukraine: Molasses Exports in 2005-2007, t... 56 Table 38. «ProAgro»: Ukrainian Molasses Exporters Rating, 2005-07... 57 Table 39. «ProAgro»: Ukrainian Molasses Exporters Rating, 11/2007... 57 Table 40. Rating Categories According to Evaluated Supplies Volumes, thousand t:... 57 Table 41. Ukraine: Basic Characteristics of Molasses... 62 Table 42. Ukraine: Sugar Beet Production in Different Regions in 2006-2007... 67 Table 43. Ukraine: Distribution of Quota A Sugar Production Volumes, Sugar Plants Breakdown in 2007... 68 Table 44. Ukraine: Average Procurement Prices for Sugar Beet, 2005-2007, UAH/t, VAT included... 71 Table 45. Ukraine: Molasses Production, Enterprise Breakdown and Producers Contact Information, 2005-2006, thousand t... 72 Table 46. Ukraine: Beet Processing, Production and Molasses Output, Enterprise Breakdown 2007... 78 Table 47. Ukraine: Sugar Plants Contact Addresses... 81 List of Diagrams and Figures Diagram 1. Structure of Global Molasses Market in 1900-2007... 5 Diagram 2. India: Molasses Trade Balance... 9 Diagram 3. Pakistan: Exports of Molasses and Ethanol... 10 Diagram 4. The Netherlands: Dynamics of Prices for Forage Grain and Molasses in 2006-2007... 10 Diagram 5. Ukraine: Regional Sugar Production in 2006... 13 Diagram 6. Ukraine: Regional Sugar Production in 2007... 13 Diagram 7. Ukraine: Distribution of Quotas A and B among Leading Sugar Manufacturers, %... 14 Diagram 8. Ukraine: Dynamics of Sugar Beet Production in 1990-2007*... 17 Diagram 9. Ukraine: Regional Breakdown of Sugar Beet Production in 2006-2007, thousand t... 18 Diagram 10. Ukraine: Regional Structure of Sugar Beet Production in 2006... 18 Diagram 11. Ukraine: Regional Structure of Sugar Beet Production in 2007... 19 Diagram 12. Ukraine: Regional Structure of Sugar Beet Processing in 2007... 21 Diagram 13. Ukraine: Processing of Sugar Beet and Purchasing Prices in 2006-2007... 22 Diagram 14. Ukraine: Regional Production of Sugar Beet Molasses and Digestion of Sugar Beet in 2006-2007... 24 Diagram 15. Ukraine: Share of Regions in Manufacturing Molasses in 2006-2007, %... 24 Diagram 16. Ukraine: Shares of Leading Sugar Manufacturers in 2005, %... 43 Diagram 17. Ukraine: Shares of Leading Sugar Manufacturers in 2007, %... 43 Diagram 18. Ukraine: Structure of Sugar Production by Different Enterprises in 2005-2007, %... 50 Diagram 19. Ukraine: Dynamics of Sugar Production by Leading Companies 2005-2007, thousand t... 50 Diagram 20. Ukraine: Dynamics of Molasses Production by Leading Companies in 2005-2007, thousand t... 51 Diagram 21. Ukraine: Shares of Sugar Holding Companies on Molasses Market in 2005-2007, %... 53 Diagram 22. Ukraine: Molasses Exports in 2005-2007, t... 55 Diagram 23. Ukraine: Exports Prices for Molasses in 2005-2007, $/t CPT/DAF/FOB Ukraine... 55 Diagram 24. Ukraine: Geography of Molasses Exports in 2005-2007, %... 56 Diagram 25. Ukraine: Key Foreign Buyers of Molasses in 2007... 58
88 Figure 1. Structure of Global Molasses Market... 6 Figure 2. Main Regions Manufacturing Sugar Cane... 7 Figure 3. Main Regions of Sugar Beet Production... 7 Fig. 4. World Geography of Foreign Trade in Molasses... 8 Figure 5. Structure of Molasses Trade in Western Europe... 8 Figure 6. Directions of Foreign Trade in Molasses in CIS States... 9 Figure 7. Ukraine: Location of Sugar Plants... 12 Figure 8. Automated Line for Preparation of Molasses Solution... 30 Figure 9. Technological Scheme of Production of Citric Acid from Molasses Using Surface Method (liquid-phase fermentation)... 30 Figure 10. Technological Scheme of Production of Citric Acid from Molasses Using Subsurface Method of Producer Fermentation... 31 Market Research «Ukraine: Molasses Market» «ProAgro», 2008 Biloruska Str., 26, Off. 5, Kyiv, Ukraine Tel. +38 (044) 586-41-20, 489-50-20 No part of this document may be reproduced or transmitted without prior permission from ProAgro Information Company