Sugar Production 2019 in Russia to reach 5 million tons !!!

https://www.agroinvestor.ru / Tatyana Kulistikova, Elena Maksimova Agroinvestor November 25, 2019

5 million tons of sugar produced in Russia, Department of Agriculture adjusts forecasts for sugar production, consumption and export from Russia !!!

According to the analytical service of Soyuzrossahara, on November 22, Russia produced about 5.08 million tons of sugar from beets from the 2019 harvest. Seven sugar factories – four in the Krasnodar Territory and one each in the Chechen and Karachay-Cherkess Republics and the Kursk Region – completed the production season. Sugar beets are processed by 67 enterprises, of which about 30 will continue to work in January 2020. Daily sugar production is 54 thousand tons, which is 3.2 times higher than domestic consumption, analysts estimated. Soyuzrossahar maintains its forecast for sugar production this season at 7.2 million tons.

US Department of Agriculture Foreign Agricultural ServiceFAS USDA) updated the forecast for the development of the global sugar market in the season 2019/20. Including she raised forecasts for Russia. So, if in May American analysts estimated the production potential in the 2019/20 season at 6.2 million tons, now they are reporting 6.8 million tons. The consumption indicator has been adjusted from 6.085 million tons to 6.25 million tons, export – from 305 thousand tons to 605 thousand tons. The service estimated carry-over stocks at 585 thousand tons, while in a previous survey it reported 440 thousand tons.

Forecasts by Russian experts differ from FAS USDA calculations. Perhaps the US Department of Agriculture, analyzing a huge number of markets and countries, it is limited in resources, therefore it is not easy for him to give a sufficiently accurate forecast for a specific country and product, suggests a leading expert at the Institute for Agricultural Market Studies ( IKAR) Evgeny Ivanov. “According to our estimates, Russia is guaranteed to produce more than 7.2 million tons of sugar, taking into account the processing of syrup and molasses,” he commented to “ Agroinvestor“. – Nobody knows exactly the level of consumption, but, according to IKARThis is 6 million tons. ” As for exports, Ivanov believes that this season he can make 0.8-1.1 million tons in traditional markets, where Russia can “reach” by rail and road.

And although suppliers from other countries are also present on these markets, we can already compete with them, since sugar prices in Russia are now among the lowest in the world, Ivanov emphasizes. “But we are unlikely to be able to sell more than 1.1 million tons of sugar to traditional markets,” the expert said. “If we want to increase export volumes, we need to establish an infrastructure for container shipping from deep-sea ports of the Black and Baltic Seas.” The volume of world sugar trade is 60 million tons, and if our prices for the FOB port are competitive, then we can ship any volumes to any market, Ivanov is sure. An example of this is grain export, which has grown tremendously over the past 20 years with the opening and development of terminals in ports, he adds.

Ivanov said earlier that sugar deliveries to Afghanistan could begin in November-December , which would be an indicator of the development of Russian infrastructure capabilities and price levels. “The Afghan market has not yet opened for us, but we expect that the first small deliveries will begin in the near future,” the expert says. “In this market, like any other, there are already established business contacts with other producing countries, but not with Russia yet.” In addition, there may be issues regarding certification, packaging, labeling, logistics and the payment system, while they are debugged with other suppliers in this country, he adds.

Deputy Prime Minister Alexei Gordeev at a meeting with President Vladimir Putin recalled that 20 years ago, 85% of imported sugar was in the consumption structure, and now Russia is exporting it with confidence. In his opinion, the markets of Central Asia are especially promising for our country. “We really hope for our partners and that we can offer conditions no worse than buying raw. But work is ongoing on this, ”Gordeev said on the sidelines of the 19th congress of the United Russia party (TASS quote). He also noted that he supported the FAS proposal to force associations to develop exports and equalize the balance of supply and demand in the sugar market. “It is clear that the association of sugar producers allows us to look more powerful in export markets,” the Deputy Prime Minister explained.

According to the forecast FAS USDA, global sugar production this season will decrease by about 6 million tons compared to 2018/19 and amount to 174 million tons. In a May survey, the service predicted sugar production at 180.7 million tons. Analysts explain the negative dynamics of production primarily by the reduction area and productivity of sugarcane in India. World sugar consumption will reach 174.7 million tons compared to 173.3 million tons last season, with growth mainly due to record highs in India at 28.5 million tons (plus 1 million tons for the 2018/19 season). Exports will grow from 54.8 million tons to 55.1 million tons. Sugar reserves in the world will decrease from 55 million tons to 49.6 million tons.

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