Ukraine may increase white sugar production nearly 3% to 1.85 million metric tons in 2024 and the exportable surplus could total 950,000 tons in the 2024/25 season, the national sugar union Ukrtsukor said on Monday.

Ukraine produced 5 million metric tons of beet sugar during the Soviet era, but has since sharply reduced production due to export problems and competition with sugar made from cane.

In 2023, Ukraine produced 1.8 million tons of white beet sugar after farmers increased the sugar beet sowing area to 250,000 hectares from 186,000 hectares in 2022.

"This year, the area sown to sugar beet will remain at the level of 2023 - 250,000 hectares, which means production of 1.85 million tons of sugar," Yana Kavushevska, Ukrtsukor acting head, told Reuters.

She said that with domestic consumption of 900,000 tons, the exportable surplus could total 950,000 tons in the 2024/25 marketing year.

The agriculture ministry expected the 2024 sugar output at 1.8 million tons and export of 900,000 tons.

Kavushevska said the European Union remained the key destination for Ukrainian sugar exports and about 493,000 tons of the commodity were supplied to the EU in the 2023 calendar year.

However, the recent EU decision to impose limits on Ukrainian sugar would mean a halving of this volume in 2024 and that insignificant volumes could be supplied to the union in the first months in 2025. The EU curbs followed several weeks of protests from farmers, saying they faced unfair competition from producers outside the bloc, such as Ukraine, who do not face the environment-related regulations and bureaucracy they do.

"In 2025, the situation is even less optimistic - we understand that our quota in the EU will be 109,000 tons of sugar, which can be exported until June 5, 2025. And what will happen after June 5 is an open question," she said.

Kavushevska said that additional 840,000 tons of sugar should find a home in 2025 at a time when export opportunities to non-EU countries are limited and this could lead to a reduction in beet acreage.

"We are indeed expecting a reduction in beet acreage, but how much will depend on both the price situation for sugar on the world market and the price situation for other crops that usually compete with beet," she said.

First deputy Ukrainian agriculture minister Taras Vysotskiy told Reuters last week that the sugar beet sowing area could be reduced by up to 20% due to a possible sugar overproduction.

Kavushevska said that the effective functioning of the Black Sea ports and the full restoration of container traffic was of paramount importance, allowing sugar to be supplied to alternative markets in West Africa and the Mediterranean region.

"But we hope and believe that even after June 5, 2025, the EU will provide an opportunity to continue importing Ukrainian sugar in the amount of at least 153,000 tons," she said. (Reporting by Pavel Polityuk; Editing by Emelia Sithole-Matarise)