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RUSSIA
According to Sugar.ru price monitoring data for the period from 30.08.2018 to 06.09.2018 the US dollar rate increased by 0,5% (on 30.08 - RUR 68,15/$, on 06.09 - RUR 68,46/$). Ruble Moscow wholesale price for sugar dropped by 1,00 RUR/kg (-3,34%), Krasnodar wholesale price increased by 0,30 RUR/kg (+1,12%). US dollar Moscow wholesale price for sugar dropped by $0,017 /kg (-3,87%), Krasnodar wholesale price increased by $0,002 /kg (+0,51%).
With the launch of new plants, the pressure on sugar market increases, but while companies have much space to store sugar, they are in no hurry to dump prices, so we will see the minimum price in late autumn, as in the year past. Prices for self-pickup and railcar shipment in the range RUR 26.50-27.00, excluding urgent shipments by rail, the prices for which can be much higher.
According to the railway monitoring data by Sugar.Ru, in August 2018 Russia imported 13 thousand tons of white sugar, almost all of it from Belarus. Total imports 163.8 thousand tons of Belarusian sugar were imported to Russia in 8 months, which is slightly more than last year's dynamics - 156 thousand tons. Export of white sugar by rail amounted to 15 thousand tons in August (13.4 thousand tons went to Kazakhstan), since the beginning of the year - 249 thousand tons (in 2017 - 253 thousand tons). In August, the transit of white sugar by the Russian rail decreased significantly: 37.5 thousand tons against 47.3 thousand tons in July. The main supplier of transit sugar across the territory of Russia in August is Ukraine (25 thousand tons), the main receiver - Uzbekistan (30 thousand tons).
Expectations for the harvest in the Krasnodar region are pessimistic, falling as low as 30% of the level of production last season. In anticipation of the decline, a number of companies, Pokrovsky, in particular, have suspended sugar sales, expecting a future deficit and, consequently, higher prices. Nevertheless, even if we accept a conservative estimate of the expected production of sugar this season at 6.2 million tons, we enter the season with carryover stocks higher than last season, so that the balance of this season does not differ much from the previous one, and in any case, it is necessary for Russia to export sugar outside the Customs Union. The growth of the dollar, which has grown from RUR 57/$ to RUR 68/$ (+ 20%) since September 2017, plays into the hands of exporters, but this growth was largely offset by a fall of sugar values at the exchange, from USD 377 to USD 330/MT (-12%). Ukraine today offers sugar to the Central Asian countries at USD 330-350 per ton, but they have dearer logistics, so the competitive price of Russian sugar should be about USD 370/ton = RUR 25 per kilo without VAT.
The situation with the railcars does not improve and, probably, will not improve in the near future. A number of manufacturers have stopped selling sugar by rail completely, and for fast rail shipments the premium for urgency reaches RUR 3 for each kg compared to self-pickup.
BELARUS
As of 6 September, 2018, sugar beet was harvested from an area of 4.84 thousand hectares or 4.86% of the area sown (in 2017 - 3.78 thousand hectares), Sugar.Ru was informed by the Ministry of Agriculture of the Republic of Belarus. Bulk harvest makes 196.5 thousand MT of beets (in 2017 - 161.8 thousand MT), with an average yield of 40.56 MT/ha (in 2017 – 42.86 MT/ha).
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