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IKAR in Mass Media

Russia sugar lobby: no seasonal duty before Nov

21 марта 2007 года

MOSCOW, March 7 (Reuters) - Expectations that top sugar buyer Russia will raise its import tariff for raws in April or May, which spurred imports at the start of the year, proved to be wrong, the main sugar industry lobby said on Wednesday.

"We have failed to persuade some bureaucrats of the necessity to set up the tariff for the spring-summer period," Sergei Mironov, deputy head of the management committee of the Russian Sugar Producers' Union, told Reuters.

"Now we are planning to set it for six months in November or December when sugar beet processing period is in full swing."

He said the union's management committee planned to set the rate of the new tariff and to approve the procedure of setting it in the next two weeks.

The union lobbied for a tariff of $270 per tonne to replace the current $140 per tonne tariff for five months from March to protect domestic beet growers and processors.

But after the government said this was too high, it cut the proposed rate to $250 per tonne in January. In February and March the lobby still expected to persuade the government to set the tariff in the next two months.

Under the Russian tariff calculation scheme, the Economy Ministry sets the rate on a monthly basis. It is pegged to the average New York futures price for the three preceding months.

Russia has kept the tariff at the current level for the past 17 months.

Russia refined 587,700 tonnes of white sugar from imported raws in the first two months of the year, or 133 percent more than a year earlier, due to higher imports sparked by Russia's plans to adopt the seasonal tariff, the union said in its monthly bulletin on Thursday.

Russia expects to have refined 3.3 million tonnes of sugar from domestic beet in 2006, an all-time high volume and sufficient to cover more than half of its demand.

MARKET GLUT, PRICES DOWN

The independent analytical centre Institute for Agricultural Market Studies (IKAR) said in its monthly bulletin that high volumes of beet sugar refining, stocks and imports of raw sugar had created a glut of sugar on the domestic market.

"In January and February, raw sugar imports nearly doubled from a year ago period. February 2007 imports rose to 360,072 tonnes from 272,673 tonnes in February 2006, January imports rose to 423,492 tonnes from 135,365," IKAR said.

"March import volumes are estimated at 380,000-400,000 tonnes (375,864 tonnes in March 2006) unless companies annul certain shipments."

IKAR said some importers had decided to send back ships loaded with raw sugar, losing at least $15 per tonne without taking into account losses caused by halting sugar refineries.

"Regional sugar market operators ... were the first to voice the forecast that the market is facing stagnation in the coming months. We can only agree with them," IKAR said.

It said the glut pushed down white sugar prices, which in the benchmark Krasnodar region fell to 13,900-14,000 roubles ($529.7-$533.5) per tonne at the end of February, from 14,400 roubles at the start of the month.

IKAR said it saw high sugar stocks, a lack of demand and prices staying at end-February levels at least until the end of the month.

It said low prices were unlikely to stimulate a significant increase in the area to be sown to beet this year. IKAR forecasts the sown area to rise by just two percent to some 1.025 million hectares from 1.004 million in 2006.

Source: Reuters  |  #sugar   |  Comments: 0   Views: 69

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