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Russia Sugar Stocks at Highest Since 2004-05 Seen Damping Prices

14 июня 2013 года

June 14 (Bloomberg) -- Russia, once the largest sugar importer, is heading for the biggest stockpiles of the sweetener since 2004-05, potentially reducing imports and pushing prices lower next season, according to the Institute for Agricultural Market Studies.

Russia will have more than 1.5 million metric tons of sugar carryover stockpiles by the end of the 2012-13 season on July 31, the largest amount since 2004-05 when the stockpiles were 4,000 tons bigger, according to the data from the Moscow-based researcher, also known as Ikar.

Sugar producers won't start to buy imported raw-cane sugar until December, three months later than usual, and will purchase less than the U.S. Department of Agriculture's estimate of 1.03 million tons, said Evgeny Ivanov, an Ikar analyst. Inbound shipments may be 800,000 tons, he said.

"This will push the world market to a deeper and longer downtrend until the end of this year, which can continue in the first year half of 2014," Ivanov said in a phone interview from Moscow yesterday.

Raw sweetener declined 15 percent to 16.59 cents a pound in New York since the start of January. It fell 16 percent last year and 27 percent in 2011.

Processing Capacity

Russia was the world's biggest sugar importer from 1990-91 through 2004-05, USDA data show. The country produced a record 5.1 million tons of sweetener from beets in 2011-12. Ikar estimates output fell to about 4.8 million tons in the current season because of limited processing capacity, and expects another cut in production to 4.2 million tons in 2013-14, Ivanov said.

Beet-producing nations will reduce sugar output 8.3 percent to 34.3 million tons next season as the crop, unlike cane, is planted annually and is therefore more sensitive to prices that fell this year, London-based Czarnikow Group Ltd.said on June 5. The sugar season in Russia starts Aug. 1 when factories begin processing sugar-beets and ends July 31.

Russia's farmers reduced the beet area this year. They planted 909,200 hectares (2.25 million acres) with sugar beets as of June 11, 13 percent shy of the the target area, and 216,700 hectares less than a year earlier, Agriculture Ministry data show.

"Astronomically high" sugar stockpiles, the product of excess imports and lower consumption, will still outweigh the decline in beet-sugar output and lessen Russia's requirement for inbound shipments, Ivanov said.

Brazil

According to the median forecast of 13 analysts, sugar prices may be 18.92 cents a pound in the first quarter of 2014 compared with 19.69 cents on the first trading day of this year, data compiled by Bloomberg show.

Russia's smaller import requirements in 2013-14 probably will affect its main suppliers, notably Brazil, Ivanov said.

"Brazil is our dominant raw-cane sugar shipper, and any changes in Russia's sugar purchases will affect Brazilian suppliers first of all," Ivanov said. Other suppliers include Thailand, Cuba, El Salvador and India.

Brazil's Trade Ministry ranked Russia as the country's fourth-biggest consumer of its raw sugar through April this year after India, Algeria and the United Arab Emirates. Russia's imports were worth of $217 million, the ministry's data show. The figure includes shipments to the former Soviet republics along with supplies to Russia, Ivanov said.

Source: Bloomberg  |  #sugar   |  Comments: 0   Views: 86

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