Sugar market news from Russia and Ukraine, Feb 14, 2019

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RUSSIA

Consumer prices for sugar in Russia decreased by 0.5% from February 5 to February 11, 2019, according to Rosstat. Since the beginning of February 2019. Consumer prices for sugar decreased by 0.6%, and since the beginning of the year - increased by 0.4%.

At the end of January 2019, the TRIO Group of Companies signed a provisional agreement on strategic partnership with a potential investor, SUCRES & DENREES. The framework of this partnership includes joint management over the sugar business and over a part of the agricultural division of the TRIO Group of Companies, where SUCRES & DENREES will become the majority partner.

According to Sugar.ru price monitoring data for the period from 07.02.2019 to 14.02.2019 the US dollar rate increased by 0.0% (on 07.02 - RUR 65.67/$, on 14.02 - RUR 65.68/$). Ruble Moscow wholesale price for sugar dropped by 1.00 RUR/kg (-2.5%), Krasnodar wholesale price dropped by 0.50 RUR/kg (-1.47%). US dollar Moscow wholesale price for sugar dropped by $0.015/kg (-2.71%), Krasnodar wholesale price dropped by $0.008/kg (-1.54%).

The decline of the wholesale sugar price, which lasted two weeks, was replaced by a sharp increase on Thursday, February 14. If in the morning it was still possible to buy limited shipments at 33.10 rubles / kg, by the middle of the day it was impossible to buy any volume at 34 rubles/kg, and most of the sellers have suspended trade. Two versions of such price rise are in the air: yesterday's “visit” of the Federal Tax and Federal Security Services to one of the Rusagro companies and the possible settlement of a pool of sugar exporters, which will allow to sell the commodity surplus in the foreign markets. In any case, there are no serious reasons for such an excessive price increase, except for speculative ones, and it is premature to draw any conclusions about the future price movement.

According to Sugar.ru railway monitoring data, in the first half of February 2019, Russia imported 11.8 thousand MT of sugar from Belarus and Ukraine (748 tons from Radekhovsky sugar factory was shipped to Kaliningrad). Exports are still low; in just 14 days, 3.5 thousand tons of white sugar was exported by rail, which is not surprising at current high prices. From the beginning of February, 7.1 thousand tons of goods passed through the territory of Russia: 6.4 thousand tons of Ukrainian and 663 tons of Belarusian cargo.

Vessel ‘St. Sofia’ with raw sugar cargo, of which 10 thousand were intended for Kazakhstan, was moved from seaport pier to anchor on roads. This is probably due to the next problems with payment by the Kazakhstan counterparty. If the problems with money would last a long time again (in 2018, two vessels waited for payment in Novorossiysk for almost half a year), then Kazakhstan will have to import Russian and Belarusian sugar.

According to Sugar.ru railway monitoring data, in the first half of February 2019, Russia imported 11.8 thousand MT of sugar from Belarus and Ukraine (748 tons of Radekhovsky sugar factory was shipped to Kaliningrad). Exports are still low; in just 14 days, 3.5 thousand tons of white sugar was exported by rail, which is not surprising at current high prices. From the beginning of February, 7,1 thousand tons of goods passed through the territory of Russia: 6.4 thousand tons of Ukrainian and 663 tons of Belarusian cargo.

UKRAINE

According to Statkom of Ukraine, conducted by Zerno.Ru, wholesale price of flour increased over the month by 0.18% in January 2019 and has made 11.36 UAH/kg (in previous month - 11.34 UAH/kg, in January 2018 - 9.55 UAH/kg). Russian rouble equivalent price (at the exchange rate of the Russian Central Bank for the middle of the reporting month) has increased over the month by 0.55% in January 2019 and has made 27.22 RUB/kg (in previous month - 27.07 RUB/kg, in January 2018 - 18.93 RUB/kg). USD equivalent price (at the exchange rate of the Russian Central Bank for the middle of the reporting month) has decreased over the month by 0.59% in January 2019 and has made 0.405 USD/kg (in previous month - 0.407 USD/kg, in January 2018 - 0.335 USD/kg).

Sugar.Ru

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