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IKAR in Mass Media

ED&F Man Is Shipping Russian Sugar in Ways Not Seen in a Century

16 мая 2017 года

∙ Vessel carrying 6,000 tons of sugar in bags left in early May
∙ That’s the first break-bulk shipment from Russia in a century

(Bloomberg) -- To keep up with booming production, one of the world’s top traders is turning to a way of shipping Russian sugar that hasn’t been used in a century.

ED&F Man Holdings Ltd. has used a break-bulk cargo, in which sugar is sent in bags in a ship’s hold instead of in containers that dominate global refined-sugar exports. The shipment of about 6,000 metric tons of white sugar that left the Black Sea port of Novorossiysk in early May was the first break-bulk cargo from the nation in a century, the Russian Union of Sugar Producers said.

Russia has spent a decade investing in beet refining, boosting output to a record and leaving it with excess supplies to ship out. While previous exports have been mostly by rail to nearby countries, as well as some in containers on ships, the nation needs to expand into break-bulk to gain more clients on the world market.

“The crop in Russia has been increasing due to more plantings and better yields,” Jascha Raadtgever, managing director for sugar at ED&F Man in London, said by phone. “This trend is going to continue and Russian sugar will reach the world market. As ED&F Man, we have a strong presence in Russia and we wanted to experiment with other ways of shipping.”

Russia’s sugar output climbed 19 percent to 6.15 million tons this season and production next year is also expected to be large, at 5.8 million tons, according to the producers’ union. The nation may export 350,000 tons this season, mostly by rail to destinations including Kazakhstan and Azerbaijan, said Andrey Bodin, head of the union.

"Considering that Russia started to produce more sugar than it needs, export logistics have become a restraining factor for the industry,” he said by phone. “Further development of the new way of shipment will allow for more efficient exports of Russian sugar.”

Using Containers

Most sugar-exporting countries have been moving away from break-bulk in recent decades and into containers. Industry estimates show containers account for 60 to 80 percent of the world’s refined sugar exports, according to a presentation by Intercontinental Exchange Inc., which last year started containerized-sugar futures.

Still, some major sugar factories in Russia don’t have the equipment to load containers, according to Alexey Bezborodov, director general of transportation consultant InfraNews. Russian port charges are about double those of neighboring beet-sugar exporter Ukraine, according to Evgeny Ivanov, analyst at the Institute for Agricultural Market Studies, or IKAR.

While Russian output has boomed, its exports are still dwarfed by top producers such as Brazil, which is expected to ship 27 million tons in the 2016-17 season, according to the U.S. Department of Agriculture.

The break-bulk cargo shipped by ED&F Man contained sugar produced by Prodimex Group, Raadtgever said.

Source: Bloomberg  |  #sugar   |  Comments: 0   Views: 258

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