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Wednesday, November 15, 2017

New sugar records Russia prevents Ukraine


Western experts admire how Russia has transformed its sugar industry. The efficiency of cultivation of sugar beet, technological upgrading and skilful work with the WTO has allowed Russia to achieve unprecedented performance. However, to build on the success of the Russian manufacturers to win the competition a very dangerous opponent, Ukraine.

The sugar beet industry in Russia has achieved considerable success. First, according to the agriculture Ministry, the gross harvest of sugar beet increased over last year by as much as 35% to 51.2 million tonnes. Secondly, the production of beet sugar, according to the Institute for agricultural market studies (IKAR), could exceed 6 million tons. This is an absolute record in the history of Russia. The acreage of sugar beets has increased almost by 9% to 1.11 million hectares, yield – almost 19%, to 467,1 quintals per hectare.

“When joining WTO, Russia has managed to defend the sugar industry, while maintaining protective measures and duties”

Finally, the industry has achieved record productivity. In General, over the last 20 years the productivity of the beet sugar complex of Russia has grown almost five times – and now with one hectare of crops are harvested 5.3 tonnes of sugar. “What industry in Russia could seriously increase the productivity in the last 20 years? Metallurgists, oil industry workers? I such examples do not know. A significant rise in the productivity of grains and other crops and products of their processing, but not significantly,” – says the newspaper VIEW leading expert of IKAR Evgeniy Ivanov. Moreover, in Russia in the next 10 years have the potential to double productivity – up to 8-10 tons of sugar per hectare, he adds.

What happened? First, Russia since 1996, has steadily built a system of protection of the sugar industry, imposing duties and quotas on imports. Upon accession to the WTO, Russia has managed to maintain protective measures and duties for the sugar industry.

The result – and this is the second in the sector made investments. And despite the fact that beet is one of the most capital-intensive and expensive crops. “In one hectare you have to invest three to five times more money than in grains and oilseeds. The beet production costs and returns per hectare can be compared only with the cultivation of greenhouse vegetables,” says Ivanov.

Investors, in turn, revised the entire system of work in the industry and completely abandoned the orders of the Soviet era. “Now use the most modern technology are introduced hybrids of sugar beet seeds, the new technology of application of fertilizers and plant protection products, for a long time already there is no hand-weeding,” says the source.

In the end, first Russia refused to import white sugar, which is bought mostly in the Ukraine. Switched to imported raw sugar and load their own processing plants. Then it restricted imports of raw sugar, increased thereby producing its own sugar beet, which is now being processed at the Russian factories.

Now Russia is ready to supply its sugar exports. “Earlier we exported raw sugar. At the peak in 1999-2000, we have exported 760 thousand tons, – says Evgeny Ivanov. – And now we export beet sugar in significant volumes, that never happened. The latest surge of exports to 230 thousand tons in 2011/2012 was the year when the record was set for the production of beet and sugar. But in 2012-2015, almost all zero. With the 2016/2017 year, we went back in growth.”

Such rapid production led to the fact that sugar prices in Russia were lower world. “Russia has not lived in such conditions, never,” – said Ivanov. And the output here can be two – or will have to cut the beet and manufacture of sugar, or required to enter new export markets.

Export potential

Even in the West, drew attention to how Russia raised its sugar industry. Once the country was the world’s largest importer of sweet raw, and now may turn into a net exporter in the season 2016/2017, according to the International sugar organization.

“Over the past 20 years, the production of beet sugar in Russia increased almost five times. We fed ourselves and have the potential to export. The balance on foreign markets it is necessary to send at least 500 thousand tons of sugar. But while we’re going at such a pace that will sell for export only 200 tons. Russia to become a net exporter, you need to withdraw more than supplies us with Belarus. And it is not easy,” – says Eugene Ivanov of ICARUS.

Russia continues to import Belarusian sugar in the amount of at least 250 thousand tons per year. Belarus has a bit of export industries that generate foreign exchange earnings, the sugar industry is one of the pillars of the economy of the country. Russia buys Belarusian sugar more for political reasons. Although in the past there were an economic reason – Belarusian sugar was cheaper than the Russian. “But the trend of this season is that for the first time in a long time in Belarus, the price of sugar is higher than in Russia. However, the Belarusian sugar supplies to Russia did not stop for a minute. Russia is helping the Belarusian economy,” – said Ivanov.

Russia must find a way to increase exports. Traditional markets – all former USSR countries, Afghanistan and Mongolia. “Plus, a small market – the Mediterranean countries, where the sugar is shipped by sea. But these supplies are irregular and inadequate,” – said Eugene Ivanov.

To break into new markets extremely difficult. “International trade white sugar highly regulated and competitive. Many countries pursue the same strategy, and Russia – to protect the domestic market. For export markets there is a tough fight, and we are in this fight until we win,” – said the expert.

In the last three years the exports of sugar from all the countries of Europe seriously hampered by Ukraine, which is much earlier began to look for export markets for its sugar. To date, Ukraine has fulfilled many of the questions on logistics, certification, quality and packaging, which we now have to resolve. “Ukraine in the past year managed to export 500 thousand tons. She went out to the markets of the Indian ocean – Myanmar, Sri Lanka, Seychelles, etc. – largely due to the fact that established container and ship exports,” – says the expert of IKAR.

Russian sugar due to high logistics and related costs of losing the competition. “Export of sugar from Russia is long, expensive and difficult. For example, the cost of transshipment in the port of Novorossiysk higher than in the port of Odessa. We have a lot of work”, – said the interlocutor of the newspaper VIEW.

The Ministry of agriculture plans for the new year to increase acreage of sugar beets on 18 thousand hectares IN ICARUS expect a slight decline. “If the weather is good, we is not difficult to make at least 5.5 million tons of sugar. According to the Belarusian supplies to 250-300 million tonnes of excess stocks from the previous season to say that the internal balance is normalized, is not necessary. Need export and planning of the beet crop to prevent oversupply in the industry”, – the interlocutor concerned.

source

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