IKAR in Mass and Industry Media

Russian raw sugar imports seen rising - analyst

Reuters

MOSCOW, Feb 27 (Reuters) - Top sugar importer Russia may increase raw sugar imports in coming months as rising domestic prices make the refining of raws profitable, an analyst said on Monday.

"Russia may import up to 280,000 tonnes of raw sugar in February this year, compared to around 140,000 in February 2005," Yevgeny Ivanov of the independent Institute for Agricultural Market Studies (IKAR), said in a note.

"From March 2006, Cuba will join the traditional supplier Brazil. If the price trend is maintained, Ikar believes Russia may import no less than 300,000 tonnes of raws in March-July."

Ivanov estimates that current world prices of sugar at around 17.62 cents per lb, down from a recent peak of 19.73 cents, correspond to production costs of cane sugar of $720-$730 per tonne ex-works in the benchmark Krasnodar region.

"The price of raw sugar ex-works Krasnodar was $781 yesterday. And prices in some (distant) regions like Chelyabinsk, Yekaterinburg, Kemerovo (in the Ural Mountains) are in the region of $1,030 per tonne," Ivanov told Reuters.

"However, rising imports will push domestic prices down as early as in the middle of March."

Earlier this week, Sergei Gudoshnikov, senior economist at the International Sugar Organization, said Russian domestic stocks were tight due to low imports in the previous months and a decline in the stocks refined from domestic beet.

Russian raw sugar imports rose by 12 percent to 2.89 million tonnes last year. Refining from imported raws rose to 3.13 million tonnes from 2.65 million in 2004.

The country refined 2.5 million tonnes of white sugar from the 2005 crop, compared to 2.24 million a year ago.

02.03.06

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