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Commodities Buzz: Russia Sugar Output Jumps Over 7 percent In 2017, 10.01.18

Commodities Buzz: Russia Sugar Output Jumps Over 7 percent In 2017

Beet sugar output in the current campaign is forecast at over 6,6 million tonnes by the Institute for Agrarian Market Studies (IKAR). Last year Russia produced 6,2 million tonnes of sugar.

Combination of continuing increase in productivity and expansion in acreage (by 7,9% to 1,198,000 ha) informs the record output.Over the past 21 years, productivity has increased four-fold, exceeding 5,5 t sugar/ha. Over the next 3-5 years, there is the potential to increase this further to 7-8 t/ha.

Combination of significant investment and with it improvement in overall crop management, cultivation of improved productive cultivars, mechanization as well pursuing sound storage measures to minimize storage losses have supported the growth in output.

On the processing side, modernization of sugar factories has contributed to the reduction in energy consumption by 4.8% and increased processing capacity by 6.9%. This has supported an increase of 7% in sugar output in the factories, says IKAR.According to Soyuzrossahar, 43 sugar factories are currently processing sugar - daily output is 24,000 tonnes. By December 28, 5.98 million tonnes of sugar were produced, which is 500,000 tons more than a year ago. About 40 sugar plants will continue processing beets in the first half of 2018 which is expected to generate an output of further 600,000 tonnes of sugar.

Export markets for surplus Russian sugar (unlikely to exceed 600,000 tonnes) are likely to be in traditional sales markets with established rail and road links to CIS countries, Afghanistan, Mongolia, North Korea. Sea export from the Russian Federation is still limited by high costs and low throughput of a single deep-sea port, capable of loading packed sugar. Then there is also the question of whether it can effectively compete in the global market with the low-cost producer such as Brazil.

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