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IKAR in Mass Media

Russia faces sugar glut ahead of new import duty

21 марта 2007 года

MOSCOW, Feb 8 (Reuters) - Russia faces a glut of sugar as importers have increased shipments ahead of a proposed new seasonal tariff, while stocks of beet sugar are much higher than in previous years, analysts said on Thursday.

"Even if current levels of imports are maintained, the Russian market faces over-saturation," the Institute for Agricultural Market Studies (IKAR) said in its monthly report.

Russia plans to set a new seasonal raw sugar import tariff of $250 a tonne in April, below a previously planned $270, industry lobby the Russian Sugar Producers' Union said earlier.

The seasonal tariff will replace the current floating tariff, which has been set at $140 a tonne for more than a year.

"The Economic Development and Trade Ministry has requested we present additional calculations to prove the necessity of the tariff and proposed to cut it to $250 a tonne, to which we agreed," Sergei Mironov, deputy head of the sugar union's management committee, told Reuters.

He said the union expected the tariff to be set up in April, but traders have said it could be effective from March, while IKAR said it expected the tariff no earlier than May.

"We are still collecting signatures on a draft resolution ... and no one has yet scrapped the demand of the tax code to keep a 30-day quarantine after the resolution is issued. So we still expect it (the tariff) some time in April," Mironov said.

The lobby has been trying to persuade the government to replace the current floating tariff with a seasonal rate of $270 on raw cane sugar for five months from March. It argues this would protect domestic sugar beet growers.

Under Russian legislation, a customs tariff normally becomes effective one month after a resolution setting it is signed by the prime minister and officially published in the government gazette.

HIGH STOCKS

IKAR said 797,000 tonnes of raw sugar were either imported to Russia or were being unloaded between November and January, compared with 235,000 in the same period last season.

Another 400,000 tonnes were on their way to Russia, it said.

The analyst group expects February raw sugar imports at 370,000-400,000 tonnes, compared with an estimated 354,000 in January and 287,000 tonnes in December.

Last season Russia imported 272,673 tonnes in February, 135,000 in January and 50,000 tonnes in December.

IKAR said stocks from the 2006 crop beet sugar carried over to 2007 were estimated at 1.264 million tonnes, compared with 315,000 on Jan. 1, 2006 and 468,000 tonnes a year before that.

"January is normally characterised by weak demand for sugar and other commodities. Regions are not in a hurry to buy sugar above their strict consumption volumes. So ... traders have to sell large shipments at a discount," it added.

Russia, which expects to refine a record 3.3 million tonnes of sugar from domestic beet in the current 2006/07 crop year, produced 3.25 million tonnes by Jan. 24, up 31 percent on the corresponding year-earlier period, the sugar union said.

Raw sugar refining in January rose 143 percent year-on-year.

In addition, IKAR expects 180,000 tonnes of white sugar to be imported from Belarus and 60,000 from Moldova in 2007.

As a result, sugar prices have been falling. White sugar traded at 14.30 roubles ($0.540) per kg at the end of January in the benchmark Krasnodar region, down from 15.00 roubles at the beginning of January, IKAR said.

"A good price scenario for February could be 15.00 roubles per kg in Krasnodar. But it could happen that we will not see a rise in prices in February due to weak demand and large import volumes," it said.

Source: Reuters  |  #sugar   |  Comments: 0   Views: 68

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