Product lines council concerned about alarming situation on Moldovan sugar market

The Council for the Product Line of Sugar Beet, Sugar and Derived products, under the Ministry of Agriculture and Food Industry, has expressed its concern over the current situation on the Moldovan sugar market.

According to the Council, the flows of contraband sugar from Ukraine to Moldova have sharply rose starting from January 1, 2013, after the Moldova authorities increased the VAT rates on sugar from 8% to 20%.

«In spite of the unprecedented reduction of transfer prices from 10.60 to 8.75 lei per kilogram (without the VAT), in January 2013, the sales turnover of the local companies have fallen three-fold, in comparison with January 2012,» said sources in the council.

The sugar producers drew attention to the growing volumes, as well as to the expanding sales geography of the contraband sugar in 2013, which points to the consolidation of fraudulent schemes and to the creation of a large-scale black market of sugar in the Republic of Moldova. Although officially, the Republic of Moldova does not import Ukrainian sugar, this product is being sold without any accompanying papers on the Moldovan markets in rural and urban areas, as well as in sales outlets. The Ukrainian sugar is sold in unlabelled packages and even in packs with Ukrainian trademarks.  
For this reason, the Moldovan sugar producers are going to fully use, for the first time ever, the quota on duty-free export of its sugar to the European Union (34 thousand tons), as the prices on sugar in the European Union are 26% higher than in the Republic of Moldova.

The Council for the Product Line of Sugar Beet, Sugar and Derived Products adopted a resolution, which states that the exhaustive use of the exports quota on sugar may lead to a deficit on the internal market. Most likely, this deficit will be replenished by means of contraband. For this very reason, the Moldovan sugar producers may loose the internal market. This will cause an increase in corruption indexes, as well as lower tax revenues to the state budget.   
In order to avoid this situation, the Council has urged the law enforcement and tax authorities, as well as the Customs and Border Guards Service, to undertake measures in order to put an end to the shipment and sales of contraband sugar in the country. In its resolution, the Council suggests that the Moldovan authorities should seek the support of the European Union Border Assistance Mission, asking it to involve in the settlement of this problem.   
The members of the Council submitted a motion to the Government of Moldova, asking the Ministry of the Interior, the tax authorities, as well as the Agency for Consumers’ Rights to carry out a string of checks in order to establish the origins of the contraband sugar in the internal trade outlets.

Adapted from Allmoldova


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