• IKAR in Mass Media

 

 → IKAR in Mass Media → #661

IKAR in Mass Media

Low profits drive Black Sea farms out of sugar into grains

29 мая 2013 года

LONDON/MOSCOW, May 29 (Reuters) - Russia's plan to be self sufficient in sugar is taking a step backwards as struggling farmers shift towards planting more profitable grains such as wheat, meaning increased sugar imports are likely, much of it from Brazil.

Last year's drought in Russia led many farmers to switch away from sugar, hampering progress towards Moscow's stated aim of producing 80 percent of domestic consumption.

A decade ago, Russia was the world's biggest raw sugar importer, but has steadily reduced its requirement.

"Two years ago, the Russians were on track to self-sufficiency. Now they have retreated," Sergey Gudoshnikov, a senior economist at the International Sugar Organization, said.

He said the area planted to sugar beet in Russia was expected to fall some 15-20 percent year-on-year in 2013/14 as many farmers turned to grains, notably wheat.

As a result, Russia's 2013 wheat crop is estimated to rise by a third this year.

"Last year's drought resulted in a drawdown of grain stocks and high domestic prices of grains," Gudoshnikov said.

Efficiency gains in sugar beet farming and processing will limit the fall in output, some analysts have suggested, as Russia's sugar industry has invested heavily in new plant and equipment, and in better seeds and fertilisers, to modernise the sector and boost yields.

"A 20 percent drop in area can't be compensated for solely by efficiency gains," Gudoshnikov said.

A Russian producers' representative said he expected Russia to boost raw sugar imports.

"Russia is able to produce enough sugar from beet to cover its needs, but will continue to import raw sugar in the next three years due to low margins and a fall in acreage," Andrei Bodin, chairman of the Russian Sugar Producers' Union, said.

IKAR said: trade houses such as Sucden, Cargill and Vitol import raw sugar to Russia, mainly from Brazil, Cuba, Thailand and India.

According to the ISO, Russia is expected to see net raw sugar imports in excess of one million tonnes in 2013/14, up from net imports of some 700,000 tonnes in 2012/13.

Increased imports are also expected despite the raw sugar import duty charged by the Customs Union of Russia, Kazakhstan and Belarus to $205 per tonne, introduced on May 1 from $140 a tonne that had prevailed since August 2011.

Russia is expected to import no more than 200,000 tonnes of duty-free white sugar from Belarus under Customs Union rules in 2012/13. However, analysts said Belarus does not tend to stick to its annual quota and was likely to supply more than this.

UKRAINE SWITCHES TOO

Ukrainian farmers, facing huge sugar stocks and low profits in the domestic industry, are also switching out of sugar sowings into grains, but Ukraine will not require sugar imports.

Ukraine's Farm Minister Mykola Prysyazhnyuk said last week that white sugar output was likely to fall to around 1.45 million tonnes in 2013 from 2.23 million tonnes due to a drop in the planted area, caused by overproduction in 2011 and 2012.

According to the ministry's data, farms have sown a bit more than 300,000 hectares of sugar beet this year versus 450,000 hectares in 2012 and 516,000 hectares in 2011.

Andriy Kim, analyst for UkrAgroConsult agriculture consultancy, said the current low profitability of white sugar production had forced large companies to allocate some of their land to grains and oilseed planting.

"We have a stable trend of switching from sugar planting to grains and oilseeds in a bid to compensate for possible losses from sugar production or to increase profitability," he said.

Source: Reuters  |  #sugar   |  Comments: 0   Views: 94

There are no comments yet. Be the first!

Only authorized users can comment.