However, the underlying dynamics of the Moldovan sugar market suggest that the emerging global trend toward rising sugar prices is likely to be felt strongly in Moldova during the upcoming marketing season. The question is likely not whether sugar prices will rise in the Moldovan market, but when and by how much.
“The Sweet Life” Around the World
It is worth noting that in May of this year, the FAO sugar price index rose by 7.5% at once. Thus, the May increase in the FAO global sugar price index more than offset the decline in this index in April.
Moreover, it was sugar, along with grains, that became the main factor driving upward pressure on the FAO Food Price Index last month.
Experts note that the May rise in the FAO World Sugar Price Index is driven (so far) solely by fears.
According to forecasts, in Brazil, due to the global energy crisis caused by the war in Iran, a very significant portion of the good sugarcane harvest will be used for ethanol production. Meanwhile, sugar production itself may decline.
Weather conditions caused by El Niño will negatively impact sugar production in India and Thailand.
All of this together could lead to a reduction in global sugar export supply during the 2026–2027 season.
Worse still, analysts at Bloomberg are even less optimistic about the situation. They believe that the war in Iran will have a “delayed effect.”
Even if the war in the Middle East ends in the near future, the world will be replenishing depleted reserves—this will serve as a long-term factor supporting global energy prices at a relatively high level.
This will obviously affect the cost of other resources, particularly fertilizers. Consequently, it will impact the availability and cost of food, as well as the prices of bioenergy feedstocks (including sugarcane and grains).
Alas, too many world-renowned experts agree that “by Christmas, many consumers will clearly feel food inflation in their wallets.”
“The Sweet Life” in Moldova
In Moldova, there is both direct and indirect talk of unifying the VAT rate in the agri-food market. Hardly anyone remembers the lenient idea—promoted by many Moldovan business associations and some development partners—to lower the base VAT rate for the entire agri-food chain to 12–14%.
A more plausible (in terms of replenishing the state budget and reducing government spending) and simpler (in terms of administration) idea appears to be raising VAT on agricultural and food products to the standard rate of 20%.
The potential change in the tax regime affects the interests of the sugar beet industry to a greater extent than those of many other sectors of the agri-food business. This is because, currently, both raw materials (sugar beets) and sugar in the sugar beet complex are subject to a reduced VAT rate of 8%. Consequently, more than doubling this tax will undoubtedly affect the price of final products.
Since VAT is a “consumer tax,” the increase in the tax burden will be felt most acutely by the end consumers—households—of Moldovan sugar. This is acknowledged even by non-opposition politicians, who by definition have an interest in social and electoral stability in Moldova. Nevertheless, some of them have announced a potential increase in food prices on the Moldovan market of approximately 10%.
Competition is the key
Until now, both the operators of Moldova’s sugar market and the country’s authorities have gauged the “price temperature” of the market based on the academic “supply/demand” ratio. Accordingly, the following factors were significant and a key topic of professional discussion: beet and sugar production volumes, the size of last year’s local and imported sugar inventories, and the level of effective demand from sugar consumers.
However, the classic formula for determining market conditions may now be partially rendered obsolete in Moldova.
A draft regulation on preferential sugar imports has appeared on the Moldovan government’s website for the second time. It is worth noting that a few months ago, this draft decision was withdrawn.
In this document’s “second coming,” the import regulation mechanism has not changed—sugar imports under free trade agreements with CEFTA countries (primarily Serbia) and the CIS are proposed to be limited to a quota of 3,000 tons per year. Moreover, this quota is to be used by sugar importers on a “first come, first served” basis, rather than being reserved exclusively for industrial sugar consumers (as was established by a government decision last November for sugar from the EU).
It should also be noted that the draft government resolution does not provide industrial consumers with any other access to sugar under free trade conditions and does not provide for the allocation of additional quotas within the existing EU quota.
In other words, the proposed measures do not create new opportunities for Moldova’s food industry to purchase sugar at competitive prices, but rather reinforce restrictions on the local sugar market.
Only the ministerial justification for the draft government resolution has changed slightly. Specifically, it notes that between January and May 2026, Moldova imported approximately 1,000 tons of sugar—from Serbia (437 tons) and Belarus (603 tons). Presumably, from the perspective of the document’s initiators and authors, this is a significant amount.
Industrial sugar consumers, however, found the justification superficial. In their view, “in the context of annual industrial sugar consumption of about 25,000 tons, this volume appears statistically insignificant and cannot be considered a factor destabilizing the market.”
Impressed by the second attempt to push through (despite opposition) a decision on strict restrictions on preferential sugar imports from the aforementioned countries, Moldovan industrial sugar consumers wrote a second letter opposing such a decision.
The letter addressed to the leadership of the Moldovan government and parliament was again signed by two dozen enterprises, which “account for about 65% of sugar consumption by Moldova’s food industry.”
They propose:
– first, “to suspend consideration and adoption of the draft until a full analysis of its economic (including competitive) and social impacts of the proposed measures is presented”;
– second, “to develop and approve the regulatory framework necessary for the application of the ‘end-use’ regime provided for in Article 323 of Customs Code No. 95/2021 with regard to sugar imports intended for industrial processing.”
In other words, sugar producers and consumers are once again engaging in a discussion about the size of the potential harvest, production, and commercial stocks.
However, there is a view that in the short term, “price dynamics” in Moldova’s sugar market will be determined not so much by these factors as by one crucial factor: the number of sugar sellers actually competing with one another.
If sugar imports from CEFTA and the CIS are limited to just under 3,000 tons by the end of this year and governed by the “first come, first served” principle, there will be “only one or two sugar sellers left on the Moldovan market.”
Given the global trend toward rising sugar prices and the prospect of an increase in the VAT on sugar in Moldova, a rise in sugar prices on the Moldovan market is only a matter of time.
This is all the more so because industrial sugar consumers are “using up” commercial sugar stocks previously imported into Moldova under preferential terms, and are entering a period of seasonal increase in demand for sugar (for canning fruits and vegetables, at the very least).
By the way, according to operators in Moldova’s sugar market, as early as late May–early June, wholesale purchase prices for sugar used in food production in Moldova rose from the February range of 13.7–14.2 lei/kg to the current average of 15.5 lei/kg.
Industrial sugar consumers fear that if the new sugar import regulations are adopted, the price of this raw material for them could rise to 17 lei/kg, since the country’s authorities have not yet proposed any mechanism to limit price increases for industrial raw materials.
