Sugar production from new crop in 2021 may hit a record 6 million tonnes

According to IKAR forecasts, sugar prices may temporarily rise in summer.

But by the fourth quarter — to decline. Regional expert Evgeny Ivanov explains the rise in prices by the late planting of sugar beets, especially in the southern regions. And the fall is the collection and processing of a new crop.

Production will reach a record 6 million tonnes of finished product. After all, 1 million hectares of this crop were planted. And at the moment there is a normal germination of seedlings and a sufficient level of soil moisture.

Thus, late sowing will not affect the yield and will allow you to get large amounts of sugar.

All information is compiled from reports. The final summary will be published only in July this year.

The data provided by the Ministry of Agriculture as of June 18 confirmed the planting scale — 1 million hectares, which corresponds to 96.2% of the previously forecasted area.

Rosstat informed that last year the territory of 926 thousand hectares was occupied by sugar beet. Its total gross harvest was 33.9 million tons, compared to 2019 — 53.4 million tons.

Today, the Ministry of Agriculture confidently predicts an increase in yield. It is planned to collect up to 40 million tons of agricultural crops. In addition, according to BusinesStat statistics, over the past 2 years, there has been a steady increase in the output of the finished product.

However, Evgeny Ivanov said that in the Altai Territory and the Volgograd Region, the scale of sugar beet sowing has slightly decreased in relation to 2020.

Therefore, according to the expert, — «One should not expect large yield indicators in Bashkiria, where the dry climate remains, and in Altai, where the estimated areas were not involved — 23.3 thousand hectares out of 25.8 thousand hectares.»

«Such figures are unpleasantly surprising», — adds Evgeny Ivanov. Since the region has long-term contracts between small producers and the «Cheremnovsky sugar plant«.

The expert continues and clarifies, — “There is another depressing trend in these areas — many independent enterprises have not increased, while others have even reduced crops. This is due to the fact that they do not have the required processing capacity, in contrast to industries and farms operating on the basis of long-term contractual obligations with sugar factories. On the contrary, both of these categories of companies increased their sowing volumes.”

Evgeny Ivanov added an explanation of this situation by artificial regulation of pricing.

In autumn, enterprises purchased beets from farmers at a wholesale cost of 42-45 rubles/kg. Landowners have received the expected profits, including in the Center and South of the country, where due to drought yields have fallen. But after the intervention of the so-called «regulator» who uncompromisingly recommended lowering prices, the cost of sugar was 36 rubles/kg.

“Under such conditions, one should not expect a significant increase in crops from independent growers, since they understand that the sale of sugar beet to processors loses its expediency from a financial point of view,” — commented Yevgeny Ivanov.

In turn, according to the Financial Director of Syukden Gleb Tikhomirov, — “in the new season, this agriculture will become one of the most profitable, because its price will reach 35 rubles/kg against the background of increased sowing scale». Only at Progress Agro (the farm, formerly called Kuban — an agricultural group founded by Oleg Deripaska), the planting area reached 12 thousand hectares.

Despite the good germination of seeds noted by experts, which lay in moist, favorable soil, a number of risks are assumed.

«First of all, it is late sowing, delayed by almost a month, which will increase the harvest time until late autumn. As a result, the preservation of root crops becomes more complicated,» — says Dmitry Alexandrovich Dubovikov. “Secondly, there is a possibility that the tubers simply do not have time to ripen,” the expert continues. In addition, if the abundance of precipitation persists in summer, the yield of sugar from raw materials will decrease.

“Comparing the cost of a commercial product excluding VAT in Russia with Asian and African countries, it is important to understand that for 2020-2021. there was no colossal increase in the level of wholesale prices», — emphasizes D. A. Dubovikov.

He also notes — “Against the background of the observed dumping, the desire to stabilize the internal Russian pressure will greatly reduce the profitability of raw materials and finished products, limit investment flows and the share of financing. Because the overwhelming majority of projects on sectoral modernization have already been paused, and some of them have been postponed altogether.»