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IKAR in Mass Media

Russian sugar imports seen falling due to credit crisis

12 октября 2008 года

MOSCOW, Oct 9 (Reuters) - Russia is poised to cut raw sugar purchases as traders in the world's largest importer struggle to fund deals as a result of the global credit crisis, a leading agricultural markets analyst said on Thursday.

The funding shortage could bring about a raw sugar deficit in Russia and force the country to turn to ex-Soviet neighbours Belarus and Ukraine for additional supplies of white sugar, the Institute for Agricultural Market Studies (IKAR) said.

"Complications in finding loans and an increase in the rates at which credit is granted to traders may lead to a temporary decline in demand for sugar and, as a consequence, to a temporary price freeze," IKAR said in its monthly sugar report.

"A shortage of funding may also cause a decline in raw sugar imports and a deficit, followed by a rise in prices," it said.

The deficit may be cushioned by imports of white sugar from Belarus, which IKAR forecast would rise to between 150,000 and 180,000 tonnes in 2009 from 100,000 tonnes in 2008. Ukraine could be another source of sugar, the analyst group said.

The Russian government is planning to extend to 2012 an agreement set to expire next year, under which imports of Ukrainian sugar are subject to customs tariffs. It says Ukrainian sugar imports will ruin the Russian market.

Ukraine, which is unhappy with the prospect of the extension, is trying to negotiate an annual duty-free quota of 300,000 tonnes, IKAR said.

Russia, which consumes about 5.8 million tonnes of white sugar annually, refined more than half of this volume from domestic beet in the last two years, producing most of the remainder from imported raw cane sugar.

It replaced a raw sugar import tariff of $140 per tonne with a higher duty of $220 per tonne from December 2007 to the end of May 2008 to protect domestic producers from excessive imports.

A tariff of $220-270 per tonne of raw sugar, pegged to New York prices, will be applied for six months from December 2008.

FALLING IMPORTS

Russia refined 2.24 million tonnes of sugar from imported raws in the first nine months of this year, down from 2.54 million tonnes a year ago, industry lobby the Russian Sugar Producers' Union said on its Web site, www.rossahar.ru.

IKAR has revised up its forecast for domestic sugar refining from this year's sugar beet crop to 2.93 million tonnes from an earlier estimate of 2.77 million tonnes. The producers' union forecasts output of 3.1 million tonnes.

IKAR said minimum sugar prices in the benchmark Krasnodar region were 14.60-14.90 roubles ($0.558-$0.570) a kg on Oct. 9.

It expects prices to fall this month to 14.00-14.20 roubles as domestic sugar beet processing accelerates, but prices could start rising from the second half of October on expectations of the import tariff increase.

The Federal Customs Service said on Tuesday Russian raw sugar imports declined to 1.79 million tonnes in January-August from 2.46 million tonnes a year ago. Imports fell to 180,000 tonnes in August from 527,000 tonnes in July with the approach of the beet processing season.

IKAR expects raw sugar imports of around 200,000 tonnes in October, close to the 193,423 tonnes imported in October 2007 and 186,271 tonnes shipped in September this year.

Source: Reuters  |  #sugar   |  Comments: 0   Views: 66

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