IKAR in Mass and Industry Media

Russia May Import Raw Sugar for First Time Since 2016

Bloomberg

* Poor weather and low sugar content hit Russian production
* Eurasian Economic Union set to decide quota this week

Russia may import raw sugar for the first time since 2016 next season, potentially pushing up domestic prices further as local mills pay higher international prices, and invest in plants that haven’t processed raws for years.

Production in Russia is set to fall short of consumption due to a smaller planting area and low sugar content in beets. The global sugar market could face its fourth straight deficit market in the 2022-23 season, according to some analysts.

Russia’s domestic sugar prices are near the highest since 2017, in line with global raw-sugar futures. That’s contributing to inflation at a five-year high that’s hitting living standards and pushing the government to bring in measures to dampen prices. Rising prices for fertilizers, fuel and pesticides are also driving up the cost of sugar-beet sowing.

Russia could set a raw-sugar import quota of 300,000 in 2022, according to Czarnikow analyst Ben Seed. The quota is expected to be decided at a meeting of the Eurasian Economic Union this week. If the quota is zero duty, then import prices may be similar and Russia could import sugar, he said.

Russia imported some white sugar in 2021, but doesn’t have the right infrastructure to receive big shipments of the commodity, IKAR analyst Evgeny Ivanov said by phone. He expects any raw-sugar imports next year to come mainly from Brazil.

“It won’t be easy to restart the raw-sugar business. Plants haven’t processed raw sugar for 5-15 years, some for over 20 years,” he said.

30.11.21

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