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IKAR in Mass Media

SUGAR DEFICIT NOT THREATENING RUSSIA - EXPERTS

28 ноября 2005 года

A sugar deficit is not threatening Russia, experts from the sugar market told Interfax commenting on reports that the world will have a deficit of 3 million tonnes of sugar at the end of the current financial year that ends in September 2006 due to lower raw sugar production in Brazil than expected.

"This forecast for the most part will not affect Russia, which has been reducing raw sugar imports over the last few years and pretty much does not import white sugar," said Sergei Mironov, deputy chairman of the Russian Sugar Producers' Union (Soyuzrossakhar).

With world sugar production and consumption at 150 million tonnes, the anticipated deficit accounts for less than 1.5%, which is lower than the margin of error that comes with such calculations, he said. "This is such a small deficit that it should not be reflected on exchange prices for sugar," Mironov said.

Alexei Khyazev, head of the sugar branch at the Rusagro group of companies, said he agreed with that opinion. "This is not a large figure, so there should not be any concerns about ensuring sugar for consumers, including Russians," he said.

The union has forecast that sugar beet production from Russian sugar beets may increase to 2.4 million tonnes in 2005 from 2.25 million tonnes in 2004. Raw sugar output from imported raw sugar could grow to 3.2 million tonnes from 2.6 million tonnes. Taking into account reserves, this is more than enough to satisfy domestic demand for sugar, which generally amounts to about 5.5-5.7 million tonnes per year.

"The world deficit for now has a sort of virtual character, but it has already led to growth on exchange prices for raw sugar," Agrarian Market Affairs Institute general director Dmitry Rylko said.

Rylko said "the exchange prices have hit the world level for the last seven years and, unfortunately, this growth is not compensating for the duty on the import of raw sugar into Russia." The scale that is used to calculate rates for duties on raw sugar imports to Russia ends at nine cents per pound and the prices on the exchange has already surpassed 12 cents, he said. "As it turns out, the duty on raw sugar imports to Russia became trivial at some point," he said.

Rylko agreed though that the sugar deficit is not threatening Russia at all and said that all demand will be satisfied.

Russian sugar producers also support this belief and many of them are planning to increase sugar beet processing this year.

Vladimir Sosnitsky, director of the PR department at Razgulyai, said that 2 million tonnes of sugar beets had already been delivered to Razgulyai's 12 sugar plants for processing this year. "This is a record for the company which was achieved on account of consolidated assets and the plan to increase the share of processed sugar beets," he said, noting that seven Razgulyai plants processed 1 million tonnes of sugar beets in 2004.

The sugar company plans to almost double output of granulated sugar from sugar beets this year to 300,000 tonnes against 168,000 tonnes in 2004.

Source: Interfax  |  #sugar   |  Comments: 0   Views: 95

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