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IKAR in Mass Media

Russia seen boosting sugar imports in summer 2010

13 января 2010 года

MOSCOW, Nov 13 (Reuters) - Russia, the world's second-largest sugar buyer, may boost raw sugar imports next summer if an import tariff cut is approved by partners in a new customs union, a leading sugar analyst said on Friday.

"Imports may rise to 2.0-2.5 million tonnes in 2010, including tolled volumes, with some 80-90 percent of this volume shipped in May-July," Yevgeny Ivanov of the Independent Institute for Agricultural Market Studies (IKAR) told Reuters.

Russian raw sugar imports in the first nine months of 2009 fell 35 percent year-on-year, to 1.21 million tonnes. Some raws are processed in Russia on the tolling basis with the obtained white sugar exported.

The Russian government said on Thursday it may cut its current raw sugar import tariff of $165 per tonne to $140 per tonne from Jan. 1, 2010 and to $50 per tonne in May-July.

But to become effective the new tariffs have to be approved by Russia's neighbours Belarus and Kazakhstan which plan to form a customs union from Jan. 1, 2010.

"The idea of the tariff is to protect the sugar sector from future low sugar prices," Ivanov said. "If prices start falling below 18 cents, tariff will start rising. It is a very positive decision, long-awaited by the sector."

Russia has regulated imports with a base tariff pegged to New York prices since 2002. The rate remained unchanged at $140 per tonne between June and December and substituted by a higher seasonal tariff rate for the rest of the year.

The rate of the seasonal tariff, aimed at protecting domestic sugar beet growers and refiners from excessive imports, was also pegged to New York prices and has been kept at its lower level of $220 per tonne.

It was substituted by a higher rate of the base tariff of $165 per tonne from May to December 2009.

NEW TARIFF CALCULATION SCALE PROPOSED

The government Commission for Protective Measures in Foreign Trade, responsible for drafting custom tariff orders, proposed on Thursday to change the range of sugar prices in New York, to which the tariff rates are pegged.

Under the proposed scale the highest base tariff rate of $270 per tonne may be applied when New York prices in the three preceding months average 13 U.S. cents per pound or less and the lowest of $140 per tonne, when they average 18 U.S. cents or more.

Previously the highest tariff was applied with the New York price of 4.5 U.S. cents per pound or less and the lowest with 9.01 U.S. cents per lb.

The March raw sugar contract inched up 0.02 cent to settle at 22.69 cents per lb in New York on Thursday.

The commission also proposed to apply a range of tariffs starting with the lowest rate of $50 per tonne in May-July with New York prices in the three preceding months averaging 22 cents and more.

The highest rate of $250 per tonne for the three months was proposed with an average price of 12 U.S. cents per pound and less. The commission also decided to examine a possible extension of this range to August and September.

"This is a compromise aimed at protecting consumers in the period when there is a shortage of beet sugar," Ivanov said.

"With current sugar prices, the tariff rate may be higher than $50 per tonne, more likely $85 per tonne," he said, adding that the tariff should rather be extended to April, rather than to August and September, when the beet processing season starts.

Source: Reuters  |  #sugar   |  Comments: 0   Views: 62

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