Sugar Prices Rose by 44% Since the Beginning of the Year
OREANDA-NEWS The growth of wholesale sugar prices in mid-September was a surprise for the market, says the leading expert of the Institute of agricultural market conditions Evgeny Ivanov.
According to this information, despite the fact that from the 24th of September in most regions of the wholesale sugar prices slowly declined in Central Russia in October, they still hold on the level of 35 rubles. per 1 kg. Rise in wholesale prices is confirmed by the Russian office of the French Sucden, which, in particular, producing sugar under the brand "Delight" and supplies products for companies Coca-Cola, PepsiCo, Mars, Nestle, Heineken.
One of the main reasons for the growth of wholesale sugar prices — low sugar beet harvest, explains Ivanov. In 2018, the acreage of sugar beet was 6% less than in the previous: under this crop was sown of 1.13 million hectares. the yield of sugar beet in the South of the country compared to last year dropped by 25%, up to 371,6 quintals 1 ha. as a result, Russia, according to IKAR, will produce in the season 2018/19 5.8 million tonnes of sugar, which is lower than the previous season and below the projected consumption level 6-6,1 million tonnes. Ivanov, however, does not expect a sugar deficit: Russia has at least 200 thousand tons of excess reserves from previous seasons, and about 300 thousand tons it imports from other countries, primarily from Belarus. With this in mind, Russia will even be able to export about 150-200 thousand tons of sugar.
A month ago, the market began to panic, which was associated with a very low yield of sugar beet in the Krasnodar region — this region provides 25% of sugar production, says financial Director of the Russian office Sucden Gleb Tikhomirov. According to this information, a bad beet harvest in the region is associated with a severe drought. When it became clear that the situation in Central Russia is better, the sugar content in beets is high, production forecasts began to increase, adds Tikhomirov, warning, however, that sugar exports this season may be reduced.