Sugar production in Russia has more than halved

Compared to last year, 2.4 times less sugar was produced in the first two months of 2021.

According to the Ministry of Agriculture, in January and February 2021, Russian factories produced a total of 271.8 thousand tons of sugar. For comparison:

In 2020 for the same period — 663 thousand tons.

In 2019 — 195.7 thousand tons.

That is, although this year’s result is worse than last year, it surpasses the level of the year before.

In total, Russia produced about 5.8 million tons of sugar in 2020.

For this year, the target level is 6 million tons. However, obstacles may arise on the way to this goal.

What hinders Russian sugar production?


Firstly, it would be from what. The sugar beet harvest in 2020 was a record low, at the level of 2014. Compared to 2019, it fell by as much as 40%, mainly due to drought and overseeding, as well as a decrease in planted areas by almost a quarter.

This year, the Ministry of Agriculture plans to harvest up to 40 million tons of sugar beets, but this figure can still be adjusted many times.

Secondly, some sugar producers may cut production volumes due to the agreement with retailers, which prohibits the sale of sugar in bulk for more than 36 rubles, and at retail for more than 45 rubles per kilogram.

This agreement has already been extended until June. This means that beet growing enterprises can also reduce the sown area.

Will there be a sugar shortage in stores?


A decline in production is already a formidable harbinger of a shortage, albeit in the distant future.

However, even now, some manufacturers have already begun to reduce sugar shipments to retail chains: they are in no hurry to make deliveries and do not even notify their partners when it will be possible to conclude contracts.

All this leads to the fact that there are less and less sugar reserves at distribution centers.

Perhaps one of the reasons is that producers want to receive subsidies from the Ministry of Agriculture , which from April 1 to September 30 is ready to compensate 5 rubles for each kilogram of sugar if it was sold at retail no more than 36 rubles (that is, at the wholesale price). In this case, the situation should improve in the next week.

It is much worse if producers decide to «hold back» sugar (fortunately, it does not spoil), since they see no point in selling it at the stated prices.

In this case, a deficit and / or explosive growth in prices may occur in the coming months.

But for now, the government hopes that this will be avoide