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The European Commission has announced a temporary suspension (postponement) of the Inward Processing Relief (IPR) regime for raw cane sugar. The decision was made to support European beet sugar producers amid a significant decline in sugar prices on the EU market. This was stated by the Chairwoman of the Board of the Ukrainian Sugar Producers Association “Ukrtsukor,” Yana Kavushevska.
In practice, this means a temporary 12-month restriction on duty-free imports of raw sugar intended for processing at European refineries. At the same time, the IPR regime for white sugar remains in force for now.
Background. In the EU sugar sector, IPR (Inward Processing Relief) is a customs procedure that allows sugar imports from third countries outside existing tariff quotas without payment of customs duties and VAT, provided that the sugar is further processed within the EU and re-exported as finished products (confectionery, chocolate, beverages, etc.).
The decision was adopted under pressure from European sugar producers and beet growers, who argued that in recent years the IPR regime had increasingly been used as a mechanism to circumvent the EU market protection system.
According to their estimates, imports of raw sugar under the IPR regime have increased sharply and now account for more than 70% of total raw sugar imports into the EU. At the same time, sugar is imported at world market prices which, according to European producers, are significantly “distorted” by government support in major exporting countries, particularly Brazil, India, and Thailand. As a result, this creates additional pressure on EU sugar prices and worsens the financial position of European producers.
The main supplier of raw sugar under the IPR regime was Brazil. According to Kavushevska, during the first five months of the 2025/26 marketing year, out of the total 371 thousand tonnes of raw sugar supplied under IPR, 369.4 thousand tonnes originated from Brazil.
“At the same time, the decision to postpone the IPR regime for raw sugar practically coincided with the entry into force of the agreement between the EU and MERCOSUR. Under its terms, the existing quota of 180 thousand tonnes of Brazilian raw sugar becomes duty-free, while Paraguay additionally receives a new duty-free quota of 10 thousand tonnes. Therefore, part of the raw sugar volumes previously supplied to the EU through the IPR mechanism may potentially enter the EU market within the framework of the new trade agreement,” she added.
As for white sugar, the IPR regime remains in place for now. For reference, out of 85 thousand tonnes of white sugar imported into the EU under IPR during the 2025/26 marketing year, Ukrainian sugar accounted for 16 thousand tonnes, or around 19%.
Thus, the consequences of the decision to postpone IPR for raw sugar may include:
- reduced competition for European beet sugar, which could potentially support sugar prices in the EU;
- a reduction in total imports of raw sugar into the EU;
- increased imports of white sugar under the IPR regime.