Price monitoring data by Sugar.ru and news from Russia and Ukraine, Jan 19, 2017

Latest news are available in our daily reports.

RUSSIA

Imports of sugar from non-CIS countries amounted to 19.4 million US dollars in December 2016, according to the Federal Customs Service of the Russian Federation.

*

From the beginning of the season and as of January 18, 2016, the sugar factories of Tatarstan have received 1,902,700 tons of sugar beet, have processed 1.8095 million tons, and have produced 266,994 tons of sugar; the average sugar production yield makes 14.4%, according to the Ministry of Agriculture of Tatarstan. Zainsky and Nurlatsky plants have already completed the production season

*

Russian consumer prices for sugar decreased by 0.5% in the period from January 10 to January 16, 2017, according to Rosstat.

*

According to the data of price monitoring by Sugar.ru for the period January 12-19, 2017, the US dollar dropped by 1.6% (on Jan 12 - 60.16 rubles / $;  on Jan 19 - 59.18 rubles / $). Ruble Moscow wholesale price of sugar dropped by RUR 1.40/kg (-4.01%), Krasnodar wholesale price decreased by RUR 1.10/kg (-3.33%). US dollar Moscow wholesale price of sugar fell by $ 0.014/kg (-2.41%), Krasnodar wholesale price dropped by $ 0.010/kg (-1.82%).

Overproduction of sugar continues to put pressure on the market, resulting in lower prices. Official prices for companies fell to 31.5 rubles/kg basis EXW, but in order to perform sales to a number of regions of the Trans-Urals the plants of Krasnodar region will be forced to offer prices below 31 rubles/kg in order to compete on price with the plants in the central part of Russia. Regional companies have to keep minimum stocks in the warehouses of sugar while market is falling, and often sell sugar at cost or even at a loss.

Recent estimates of the final production of the season speak of 6.05 million tons, taking into account desugarization of molasses. Obviously this is more than Russia can consume and Russian market participants are actively looking for sugar exports options. In addition to traditional exports to the countries of Central Asia, they already regard opportunities to sell white sugar as "raw beet" to neighbouring (non-CIS) countries supplying it to local plants which traditionally run on raw cane sugar. At present, the price of raw sugar in the port of Novorossiysk without customs clearance but including the discharge, makes about $ 525/MT (RUR 31/kg), i.e. RUR 30/kg can be considered the support level for the Russian market. If the ruble continues to get weak, as we have witnessed not once, and reaches at least RUR 70/US$, then the price of raws will make RUR 37/kg, which facilitates dispatches of more volumes of white sugar for refining in to the Caucasus and Central Asia. The long-term strategic objective of Russian sugar companies is to produce sugar of the international standard (polarisation 99.8°, 45 ICUMSA), and to elaborate logistics to sell sugar through the ports – a trick already successfully mastered by Ukraine.

Unlike sugar producers, sellers of sugar beet seeds feel fine: the volume of seeds purchased in the 2017/18 season was no less than in the previous year. If the weather is as good, we will get a second season of overproduction, which may finally bring the sugar market down, having in view unusually high carryover stocks.

UKRAINE

The Cabinet of Ministers has approved a decree "On state regulation of sugar production and sugar beet during the period from September 1, 2017 to September 1, 2018", according to which the internal volume of sugar consumption is estimated at 1640 thousand MT; in 2017 season the minimum price of sugar beet and the lowest wholesale trade price for sugar are set at UAH 633.10 and UAH 9172.57 per 1 ton (excluding VAT) respectively.

*

Top 10 exporters of sugar in Ukraine in 2016, according to Ukrtsukr:

1. "Globinskiy sugar factory" (81 thousand tons; $ 39.7 million);
2. "Vinnitsa KHP №2» (74.3 thousand tons; $ 37.0 million);
3. "Radekhiv sugar" (39 thousand tons; $ 18.6 million);
4. "Khmelnytsky" OP "Zhdanov sugar factory" (31.6 thousand tons; $ 16.0 million);
5. "Novoorzhitskom sugar factory" (27.9 thousand tons; $ 13.4 million);
6. Food company "Podolie" (22.1 thousand tons. $ 10.7 million);
7. "Agrifirm "Dovzhenko" OP "Yareskovsky sugar factory" (19.9 thousand tons; $ 9.2 million);
8. "Agroekstara" (11.2 thousand tons; $ 5.8 million);
9. "Teofipolsky sugar factory" (11.1 thousand tons; $ 5.8 million);
10. "Trans-Group" (9.3 thousand tons; $ 4.3 million).

*

Ukrainian producers have exported a record volume for independent Ukraine of 442.7 thousand tons of sugar for total value of $ 215.9 million in 2016 season, excluding 23.6 thousand tons of sugar exported by LLC "Ukrainian Sugar Company" and produced from raw cane sugar imported into Ukraine under tolling contract.

Sugar.Ru