As noted by the Institute of Agricultural Market Studies, prices have been falling since mid-June. However, the minimum values are most likely already behind us.
Traditionally, sugar prices reach their lowest levels usually closer to the new year. But this time things might be a little different.
Experts believe that prices were at their lowest level in September, and now they are likely to rise.
This may be due to the fact that for Russian sugar producers the export of their products is beginning to become increasingly important.
This means that prices for sugar within the country will depend on prices on the world market. In addition, there is also the factor of the ruble exchange rate, which has now weakened significantly.
How is the situation with sugar in Russia?
Leading ICAR expert Evgeniy Ivanov said that there are no special problems at the moment. It is planned that this year Russia will be able to produce about 6.5 million tons of sugar (last year it was 6.3 million).
The sugar beet harvest was also generally good, at 50 million tons. The drought in the south of the country, of course, reduced the harvest volume there, but this was compensated by good harvests in the central part.
Currently, 66 sugar factories are already operating to produce sugar from harvested beets.
What is happening on the global market?
Over the past 6 years, there has been a shortage of sugar in the world. This is due to problems in the main producing countries: India, Australia, Pakistan, Thailand.
For the current year, the volumes of expected sugar production there also promise not to be the highest, which is causing global prices to rise.
Can Russia succeed in sugar exports?
Since 1998, sugar production in the Russian Federation has increased 5 times, and it has turned from a major importer into a serious exporter.
However, at present there are many factors that hinder the development of sugar exports:
— Geopolitics
— Discount on Russian products
— Problems with logistics, insurance and payments
In addition, from October 1, the Russian authorities introduced a flexible duty on all export goods, which is higher the higher the dollar exchange rate. Exporters will have to pay 7-10% on almost all categories of goods supplied outside the EAEU, which may greatly reduce their desire to carry out such exports.
Russia is currently working to obtain the necessary permits to export sugar to China.
If this succeeds, then in the future it will be able to sell large quantities of sugar to China without any problems, which will open up wide opportunities for exporters of this type of product.
