IKAR in Mass Media

Russia reserve to supply 0.3 mln T sugar in March

03 февраля 2011 года

MOSCOW, Feb 2 (Reuters) - Russia's state reserve Rosrezerv will supply 300,000 tonnes of sugar to the domestic market next month in order to suppress prices following a summer drought that sharply reduced the beet harvest, the Agriculture Ministry said on Wednesday.

"On a proposal by the agriculture ministry, Rosrezerv will channel 300,000 tonnes of sugar, which will be distributed under contracts," ministry spokesman Oleg Aksyonov said on Wednesday.

"This process is expected to start in March. After the sugar beet harvesting and refining campaign end, an equal volume should be returned to Rosrezerv. This all is aimed at containing the rise of sugar prices."

The Russian Sugar Producers Union, the industry lobby group, has estimated output of sugar from domestic beet to have declined to 2.73 million tonnes in 2010 from 3.22 million tonnes in 2009 because of a severe summer drought.

It estimates output of sugar from imported raws last year to have risen to 1.98 million tonnes from 1.77 million in 2009.

The drought caused a spike in Russian food prices, pushing up its annual inflation to 8.8 percent in 2010, well above a government target of 6-7 percent, Federal Statistics Service data showed last month.

This forced the Russian government to propose an early cut of a raw sugar import tariff to $50 per tonne from $140 in March rather than in May.

But the new tariff has to be approved by the partners in a customs union, Belarus and Kazakhstan, to become effective.

Domestic sugar prices were relatively stable at 34,400 roubles ($1,169) ($1,169) per tonne last week compared to 34,500 in the previous week.

They declined to current levels from 36,200 two weeks ago, when the reports about the plans to cut the tariff reached the market, analysts of the Institute for Agricultural Market Studies (IKAR) think tank have said.

RUSSIA TO BUILD NEW SUGAR REFINERY

Also on Wednesday, the governor of the central Russian Lipetsk region, Oleg Korolyov, announced a plan to build what he said would be the world's largest beet sugar refinery with an annual output of 250,000 tonnes.

Korolyov said the refinery would be built in his region and that it will be completed by 2015.

The refinery will cost 7.7 billion roubles ($261.7 million), of which a local private firm Korni will invest 1.1 billion and the rest will be arranged by the state-run bank VEB, a VEB statement said.

Source: Reuters | #sugar | Comments: 0 Views: 79

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