IKAR in Mass Media

Russian raw sugar imports nearly double ahead of seasonal duty

04 декабря 2007 года

MOSCOW. Nov 30 (Interfax) - Russian importers nearly doubled purchases of raw cane sugar in anticipation of the seasonal import duty that goes into effect December 1.

The chief analyst at the Agrarian Market Institute (IKAR), Yevgeny Ivanov said 1 million tonnes of raw sugar have cleared customs since August, compared to 560,000 tonnes in the same period last year. Meanwhile, production of beet sugar is also higher than a year earlier.

Russian sugar mills had produced 2.48 million tonnes of sugar as of November 21, compared to 2.41 million tonnes a year earlier, he said, citing the Russian Sugar Union.

"And although by the end of the beet processing season sugar production will drop to 3.1 million tonnes compared to last year [3.28 million tonnes], this will not have a major impact on the situation, as there is a huge oversupply of sugar on the market, which is putting pressure on prices," Ivanov said.

The Sugar Union estimates that sugar stocks at the end of 2007 will total 2.5 million tonnes, or the equivalent of five months of consumption in the country.

The "country will not need this much sugar in this period," Ivanov said.

There will probably not even be the traditional increase in demand ahead of the New Year from confectionery companies, as everything that is needed for production has been bought ahead of time, he said, adding that there was not even a theoretical possibility of prices increasing in coming months.

Demand on the retail sugar market will not pick up until April-May at the earliest, he added.

Ivanov also said there was no major news from the global sugar market. Prices for raw sugar in New York have been fluctuating between 9.6 and 10.3 cents per pounds for the past two months.

The Russian government has approved a seasonal duty on raw cane sugar in the amount of $220 to $270 per tonne, depending on world prices in the period from December 1 to May 31 next year.

If the average month price is at least $198.43 per tonne (determined as the average price on the New York Mercantile Exchange in the previous three months), the duty will be $220 per tonne, compared to the current duty of $140 per tonne. With an average price of $182.99 to 198.42, the duty will be $235, up from $164; and with a price of $99.22 to 182.98, the duty will be $250, up from $180. The upper limit of the duty - $270 at a price of up to $99.21 per tonne - has been left unchanged.

The seasonal duties will be lifted ahead of schedule if Russia should join the World Trade Organization, or if the average monthly price for raw sugar in New York exceeds $259.99 per tonne.

Source: Interfax | #sugar | Comments: 0 Views: 67

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