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RUSSIA
In the period August 9–15, 2016 Russian consumer sugar prices increased by 0.3%; from the beginning of August 2016 - by 1.1%; and from the beginning of the year (vs. the end of December 2015) - by 9.5%, according to Rosstat.
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According to the data of price monitoring by Sugar.ru, for the period August 11-18, 2016, the US dollar exchange rate dropped by 1.3% (on August 11, US$ 1=RUR 64.81; on August 18 – US$ 1=RUR 63.99). Moscow ruble price of sugar fell by RUR 2.00/kg (-4.57%), Krasnodar price decreased by RUR 2.80/kg (- 6.88%). US dollar equivalent price of sugar fell by US$ 0.023/kg (-3.40%) in Moscow and by US$ 0.036/kg (-5.73%) in Krasnodar.
As we have suggested in the previous review, sugar prices continue to fall, but the rate of fall has somewhat slowed. Falling prices affected all regions, which has started to receive cheap sugar of the new season. High yield estimation, at least 5.6 million MT, and good weather continued to influent the market. Spot deals in Krasnodar have dropped to RUR 38.00 – 37.90/kg with offers of sugar at this price from several companies, including Prodimex (though prices in Lipetsk and Voronezh are higher by RUR 0.5-1.0/kg. Forward market is well below spot prices, Rusagro, for instance, offers sugar at already 35 rubles with delivery before September 7. The low price of sugar is not good for beet manufacturers, who fix their beet prices depending on current sugar prices. It should not be excluded from consideration, that large production companies will stop dumping sugar prices after they buy up a significant amount of beet at a low price; there is a chase for sugar price trends to move upwards. The first level of support is almost achieved as at the price of RUR 35/kg beet sugar becomes competitive to sugar made of raws (as estimated by Sugar.Ru, the production of raw sugar without paying customs duties will cost about RUR 35-38 rubles) and sugar exports to neighbouring foreign countries becomes profitable. For example, in Kazakhstan the retail price of sugar has returned to the level of RUR 52/kg after the excessive price rally. Last year Kazakhstan has received 135 000 tons of sugar by rail transit Russia in 7 months; this season the volume makes three times less – 46 thousand MT only, leaving much space for Russian exports.
UKRAINE
Domestic manufacture of sugar beet could reach 13 million tons in 2016, and the sugar mills may produce 1,80-1,85 million tons of sugar from 2016sugar beet crop, according to Ministry of Agrarian Policy of Ukraine.
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The economic discussion club has adjusted the evaluation of sugar consumption in Ukraine from previous 1.665 million tons down to 1.635 million tons in current 2015/2016 marketing year. Thus, over the 11 months of the current season, the domestic consumption of sugar is estimated at 1.499 million tons. Exports for the period have reached 99 000 MT, imports – 47 000 MT. Sugar stocks in the country are estimated at 382 000 tons on August 1, 2016, which is 42% less than a just year ago.
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