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IKAR in Mass Media

RTRS-Russian sugar prices rocket on import snags

17 июля 2006 года

By Robin Paxton and Aleksandras Budrys

MOSCOW, July 14 (Reuters) - Russian sugar prices, up 15 percent since late June, are set to rise further as a slowdown in imports by the world's top raw sugar buyer leaves plants idle in the peak summer demand season, traders said on Friday.

Prices normally retreat in August when harvesting of the beet crop begins, but some traders said they would keep rising next month as the shortage persists. Others forecast a decline.

"Russian sugar prices are rising fast," analyst at the Institute for Agricultural Market Studies, said.

An expected increase in home-grown beet and certification problems in Black Sea ports have slashed raw sugar imports in the last three months at the same time Russians, basking in a hot summer, use more of the sweetener to make jam and ice cream.

Russia, which produced 45 percent of the sugar it consumed last year, is increasing the area sown to beet as producers invest in new equipment and cut their reliance on imports of raw sugar, prices of which hit a 25-year peak earlier this year.

Russian imported over 40 percent less raw sugar in May and June than in the same months last year. July imports are seen slightly up and August imports, usually lower than July, could double year-on-year, but plants now have little to process.

"Sugar companies don't want to risk importing, because in August plants will be processing sugar from beet. And when they start producing from beet, sugar prices will fall," a senior official at a large trading and processing firm said.

"Companies would like more raws because market prices are so good right now, but many won't put down the cash."

IMPORT SNAGS

Sugar imports from Belarus were greatly reduced after Russia made arrests on discovering some sugar refined from raws was illegally shipped to Russia as beet sugar, a market source said.

He said some importers had encountered logistical problems, not all of which have been sorted out.

"It all started at the end of June in Novorossiisk. Local authorities demanded new quality certificates, which nobody had at the time, as nobody had been warned in advance," she said.

She added the problems in Novorossiisk appeared to have been sorted out, but similar problems emerged in Tuapse, another Russian Black Sea port.

"All companies face these setbacks. Some solve them fast, others more slowly," she said.

He said white sugar prices in the benchmark Krasnodar region rose to $808 a tonne as of July 13 from $762 on July 7 and $744 on July 4. They are now above a Feb. 21 peak of $777.

Russian domestic sugar prices were below $700 in mid-June.

A second Moscow-based trader said white sugar prices were 21.50-22.00 roubles a kg, or $800-819 a tonne, in Krasnodar and 23.50 roubles a kg ($875 a tonne) in Moscow.

The first trader said imported raw sugar cost $412 a tonne, CIF Black Sea port.

Source: Reuters  |  #sugar   |  Comments: 0   Views: 77

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