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RUSSIA
According to Sugar.ru price monitoring data for the period from 06.12.2018 to 13.12.2018 the US dollar rate dropped by -0.6% (on 06.12 - RUR 66.82/$, on 13.12 - RUR 66.42/$). Ruble Moscow wholesale price for sugar dropped by 0.30 RUR/kg (-0.77%), Krasnodar wholesale price dropped by 0.20 RUR/kg
(-0.54%). US dollar Moscow wholesale price for sugar dropped by $0.001/kg (-0.17%), Krasnodar wholesale price has not changed from $0.554 /kg.
The whole week the sugar wholesale market was dormant. Participants mark the almost complete lack of demand. The offer prices are in the range of 36.50-37.00 rubles / kg, however, buyers are in no hurry and wait for prices to fall. Our forecast for sugar production in the 2018/19 season remains at the same level of 5.9 million tons, taking into account sugar from molasses. Having in mind that the Kazakh and Uzbek markets are actually closed for Russian sugar (see below), and taking into account imports of Belarusian sugar, the current season will not be in short supply.
Yesterday’s meeting at the Ministry of Agriculture of Kazakhstan did not come to any decisions on the import of raw sugar. Currently, a quota for imports of 400 thousand tons has been approved for 2019, the last one, when Kazakhstan can import raw sugar duty free (from 2020 there will be an import duty of 5%). Uzbekistan extended the VAT exemption for raw sugar, but revived the VAT for importing white sugar. In terms of time stamp both events strangely coincided with the transition of the sugar factories of Uzbekistan to the new owners. A VAT refund on white sugar imports means that we will not see more exports of Russian, Belarusian and Ukrainian sugar to Uzbekistan. According to railway monitoring data, in 2017/18 Russia has exported 219 000 tons to Uzbekistan, and Ukraine - 306 000 tons of white sugar.
According to Sugar.Ru railway monitoring data, in December 2018, the rate of white sugar imports to Russia increased significantly, in 13 days 19.7 thousand tons of white sugar were imported mainly from Belarus (for the whole of November - 5 thousand tons). Export rates, on the contrary, are extremely low, from the beginning of the month only 3.7 thousand tons were exported (total exports in November - 11.3 thousand tons). Sugar transit through the Russian railway also leaves much to be desired, since the beginning of December 17.5 thousand tons were transported, while total transit in November was 65 thousand tons. A drop in transit volumes is observed in all major sugar receiving countries: Tajikistan, Uzbekistan, and Azerbaijan.
UKRAINE
Sugar beet harvest season is completed In Ukraine, 13.5 million tons of sugar beets were harvested, which is 1.4 million tons, or 10% less than last year, but the yield was 7% higher than last year (49.4 MT/ha against 46.0 MT/ha in 2017). Estimation of sugar production in the current marketing period was reduced to 1,750 thousand tons, which is 18% less than last year. Thus, the total supply of sugar in the season 2018/2019 is estimated at 2,190 thousand tons, the demand of the domestic market is projected at 1,370 thousand tons (at the annual rate of 30 kg of sugar per capita), according to the balances of the Economic Discussion Club (EDC).
UZBEKISTAN
Sugar producers in Uzbekistan will enjoy the extended VAT exemption until year of 2020. At the same time, the range of benefits for imported sugar is narrowing. If earlier all imported sugar (HS code 1701) was exempted from customs duties, now it will be applied only to raw sugar without aromatic or coloring additives (HS code 1701 12 - 1701 14).
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