Central Bank sees no inflation risks from sugar import quotas, but experts and business disagree

Central Bank's position: no risks from sugar

At a press conference on November 4, First Deputy Chairman of the Central Bank Nodirbek Achilov answered a question about the impact on food inflation of the 300,000-tonne sugar import quota to be introduced from 2027. According to him, sugar is one of the components of food inflation, but since the beginning of this year its prices have formed at a relatively stable level and have not shown high growth rates, which neutralizes their impact on overall inflation. “Therefore, as of today, we do not see major risks regarding sugar”, Spot quotes the deputy head of the regulator. He also noted that in 2027 the Central Bank expects food inflation to decline compared with the current level; the inflation basket includes 517 types of goods, including sugar.

What is known about the quota itself

By a closed resolution of July 30 (PCM-417), the Cabinet of Ministers decided to introduce an annual sugar import quota of 300,000 tonnes from 2027 — 100,000 tonnes each for producers of beverages, confectionery and other food products. Information about the document appeared in late October. The annual quota volume will be approved by the government in November based on “substantiated proposals” from the Ministry of Economy and Finance, the Competition Committee and the National Statistics Committee, with the possibility of revision every 6 months; quotas are to be allocated through online auctions, and the system should be operational by December 1.

Criticism from experts and business

Experts criticized the restrictions, pointing to the risk of rising sugar prices and increased costs for producers. According to calculations by economist Otabek Bakirov, import restrictions could reduce budget revenues from customs payments by $65 million per year. Yuliy Yusupov noted that import quotas and benefits for local suppliers weaken competition, while business advocate Bektosh Khatamov spoke about the possible impact of more expensive sugar on the cost of other goods and about restrictions on enterprises' export capabilities.

Objections from beverage producers

The Association of Producers of Soft Drinks and Juices of Uzbekistan (UzBev) gave a critical assessment of the planned restrictions. In its view, support for local sugar plants should not create additional barriers for other food industry enterprises, and the restrictions lead to higher production costs, reduced competitiveness of local products and increased inflation. The association also pointed to possible claims in the context of Uzbekistan's obligations upon joining the WTO: according to UzBev's assessment, the resolution violates the ban on quantitative import restrictions and creates a risk of non-compliance with the national treatment principle.

Divergence of positions

Thus, the regulator and critics of the decision assess the consequences of the quota differently: the Central Bank relies on the current stability of sugar prices and the expectation of lower food inflation in 2027, while experts and the industry association point to risks that will emerge later — rising costs, loss of customs revenues for the budget and questions about compliance with WTO obligations. Since the quota has not yet been introduced and will only take effect in 2027, its actual impact on prices can only be judged by the parties' forecasts.