IKAR in Mass and Industry Media

Russian Sugar Imports May Rise in June on Higher Tax, Ikar Says

Bloomberg

May 18 (Bloomberg) -- Raw-sugar deliveries to Russian ports are seen rising to 500,000 metric tons in June, 25 percent higher than initial forecasts, as buyers aim to avoid a potential tax increase in July, the Institute for Agricultural Market Studies, or Ikar, said today.

The raw-sugar import tax may increase 70 percent to $85 a ton in July, if the average price for the sweetener's July contract on the New York exchange drops below 22 cents a pound in May, Yevgeny Ivanov, an analyst at the Moscow-based researcher, said by phone today. ``This will activate sugar imports' growth in June,'' he said.

Under a joint agreement with Belarus and Kazakhstan, Russia taxes the imports based on monthly prices in New York trading, with a one-month lag before changes take place. Raw sugar for the July-delivery contract on ICE Futures U.S. in New York averaged 23.96 cents in April and 21.51 cents so far this month.

Imported raw-sugar unloaded in Russian ports is expected to be at least 2.2 million tons in 2010-11 compared with 2 million tons in 2009-10, Ivanov said.

The country could produce up to 4.2 million tons of sugar out of domestic beets in 2011-12, Ivanov said. Russian sugar consumption is estimated at 5.5 million tons in 2011.

Russia is expected to have a good beet-sowing area and yield this year compared with 2010, when the worst drought in at least 50 years hit most beet-growing areas in the country, Ivanov said. The season starts in August and ends in July.

Russia planted 97 percent of its sugar beet sowing target, or 1.16 million hectares (2.9 million acres), as of the end of last week, he said. That's 10 percent more than last year, he said, citing Agriculture Ministry and Sugar Producers' Union data.

The country's sugar-beet output dropped to 2.7 million tons in 2010 from 3.3 million tons a year earlier, according to Russia's Federal Statistics Service.

27.05.11

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