High stocks will cover Russia's sugar needs despite declining production

High stocks will cover Russia's sugar needs despite declining production

High stocks will cover Russia's sugar needs despite declining production

MOSCOW (Reuters) – High sugar stocks left over after five years of oversupply will close Russia's needs and allow it to continue exporting despite declining production in the 2020/21 season, IKAR said Thursday.

Farmers in the Russian Federation have cut their sugar beet planted 18% this year as the profitability of this business has fallen due to low domestic sugar prices. Russia has doubled its sugar production over the past ten years to get rid of its import dependence.

This week, IKAR cut its forecast for sugar production in Russia in the 2020/21 season, which began on August 1, to 5.0-5.4 million tons from the previous 5.6-6.0 million tons.

This is less than Russia needs with its annual consumption of 6 million tons, and significantly less than last season's production, when it amounted to 7.9 million tons.

Still, Russia has “the hell out of sugar,” Evgeny Ivanov, IKAR's chief analyst for the sector, told Reuters.

Estimates of sugar reserves in Russia vary significantly: IKAR believes that as of August 1, they were 1.6 million tons, Soyuzrossahar estimates them at 3.1 million tons.

Russia has so far harvested 3.8 million tons of sugar beets from 11% of the area, and the prospects for the harvest itself, as well as for sugar production, may still improve if the weather in September-November is warm and the precipitation is sufficient, IKAR and Soyuzrossahar believe.

Last season, Russia exported, according to IKAR, 1.4 million tons of sugar and will be able to maintain small exports this season. According to the preliminary forecast of IKAR, exports in the 2020/21 season may amount to 182,000 tons.

(Pauline DeWitt, editor Anton Kolodyazhny)

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