OREANDA-NEWS. March 14, 2013. This was declared by the Union of Sugar Producers of Moldova according to which the expert working group for product line “Sugar beet, Sugar and Derived products” analysed sugar sales and assessed an amount of contraband of sugar which has made up 405 of the total sales volume within 6 months of 2013.

The findings for February and the first week of March, summarized by the Union of Sugar Producers of Moldova, show that the average level of sugar consumption in January-March for the last five years made almost 15 thousand tons, the volume of legal sales in Q1, 2013 being 6.3 thousand tons. Thus, the sugar contraband will make close to 8.3 thou. tons or 56% of the domestic market.

With current retail prices for sugar averaging 13.3 leis per kilo, the loss of the state budget caused by the sugar contraband in Q1, 2013 will make at least 20 mln leis. Adjusted to seasonal swings in sales volumes and prices for sugar, within the year the budget will lose more than 108 mln. leis due to non-payments of duties and taxes on the sugar smuggled. If this sum is added close to 73 million leis of VAT recovered for the legal export of 34 thousand tons of sugar, the sum of the budget lose will reach 180 mln. leis.

The drastic decline in the volume of legal sales of sugar in Q1, 2013 may lead to the sweeping cut of prepayments by sugar makers to sugar beet raising companies, the reduction of plantations and crop of sugar beet and closedowns of some sugar mills for an uncertain period of time, the Union of Sugar Producers states. In February leaders of the Union introduced the analysis of the situation to representatives of MIA, EUBAM mission, Customs Service, National Anti-corruption Centre and enlisted their support to respond to the sugar contraband. As a result, at the end of February, officers of MIA detained two trucks loaded with the smuggled sugar in the region of Criuleni.

MIA opened the hot line to collect information about sugar contraband. The Union of Sugar Producers of Moldova also opened the hot line and the e0mail for this purpose (phone number: 022-228021, e-mail: upzm.moldova@gmail.com) Besides, the Union of Sugar Producers, the Association of Beet Growers and consumer rights protection organizations arranged to monitor sales outlets to detect acts of the sugar contraband.

Both: the Council for product line “Sugar Beet, Sugar and Derived products” and its working group found it the most effective method to remove framework conditions boosting the contraband. Experts propose authorities of Moldova to analyze an opportunity of reducing the sugar VAT from 20% to the level of 8% valid before January, 2013.