Volga Baikal AGRO News Update on the Sugar Market !!!

Source: RF Center of Agroanalytics as of October 28, 2020

Volga Baikal AGRO News Update on the Sugar Market !!!

OPERATIONAL INFORMATION ON THE PROCESS OF HARVESTING SUGAR BEET

According to the departmental monitoring of the Ministry of Agriculture of Russia, by October 21, sugar beets in the country have been harvested from an area of ​​722.8 thousand hectares, which is 77.9% of the crops. In 9 regions, more than 90% of the work on harvesting root crops has been completed. 26.0 million tons were accumulated. The leader in gross harvest is the Krasnodar Territory (5.7 million tons). In the Kursk, Voronezh, Tambov regions and the Republic of Tatarstan, more than 2 million tons of beets have been dug up (in each subject).

The yield in the current year is 360.2 c / ha. As of the monitoring date, in 4 constituent entities of the Russian Federation, the yield of sugar beets per hectare exceeded 400 centners: this is the Altai Territory (517.4 centners / ha, the maximum indicator in the country), the Republic of Tatarstan (441.0 centners / ha), Kursk (439.9 centners / ha) and Tula (428.8 c / ha) regions. In two more beet-growing regions, the yield at the level of 400 c / ha is the Ryazan region (399.1 c / ha) and the Republic of Bashkortostan (398.9 c / ha). An increase in yield was recorded in the Altai Territory, where the yield of sugar beets per hectare increased by 9.7%, as well as in the constituent entities of the Volga region: in the republics of Bashkortostan (+ 10.1%) and Chuvashia (+ 9.2%) and in the Ulyanovsk region ( + 0.2%).

DOMESTIC MARKET

Production

According to Rosstat, in September 2020, Russia produced 1.2 million tons of beet sugar, which is 4.8 times more than in August 2020, but 25.6% less than in September 2019. For 9 months of 2020, more than 2.4 million tons of white sugar were produced – this is at the level of 2018 and only 3.9% lower than in the record-breaking 2019. Due to the carryover stocks of sugar beet of the 2019 harvest, due to which the production of sugar was ensured at the beginning of this year, the volume of sugar production in the first 9 months of 2020 is only slightly behind last year.

Stocks and shipping

According to Rosstat, in the first half of the year, monthly shipments of sugar amounted to more than 400 thousand tons. This is higher than the average values ​​for both 2018 and 2019. In July – August, the demand for sugar was at the average level – over 300 thousand tons.

PRICES

According to the departmental monitoring of the Ministry of Agriculture of the Russian Federation, as of October 21, the average producer price for sugar beets of the new crop was set at 3,446 rubles per ton. These are favorable prices for agricultural producers after the record decline in the cost of root crops in 2019.

GLOBAL SUGAR MARKET

On the world market, sugar prices continue to strengthen. On Monday, October 19, the Intercontinental Exchange (ICE) in the United States broke another record for the price of raw sugar (sugar No. 11), quotations reached 14.72 cents per pound. Thus, since the beginning of the positive dynamics of prices after the spring collapse, the cost of sugar has reached new peak values, but at the time of monitoring it is still below the February maximum of 15.78 cents per pound. The dynamics for the month was + 13.1%, for the year – + 19.0%.

A similar trend is observed in the finished goods market, but with less volatility. The cost of white sugar on the London International Financial Futures and Options Exchange (LIFFE) increased by 6.0% over the month, and by 17.1% over the year, to $ 393.3 / t.

The Chinese market is also growing: on the Zhengzhou Commodity Exchange (ZCE, PRC), sugar quotations increased by 3.5% over the month, to USD 800.4 / t, taking into account the strengthening of the Chinese yuan against the USD (additional 2.3 %).

According to the “Center of Agroanalytics”, the rise in sugar prices in the world market is associated with the equalization of the balance of supply and demand against the background of a decrease in sugar production in the CIS and the European Union. According to the forecast of the United States Department of Agriculture (USDA), sugar production in Europe in the 2020/21 season is expected at 16 million tons, which is almost 6% lower than the previous season. The recovery in demand after the spring wave of the coronavirus pandemic is also playing a role. Thus, the global producers of carbonated drinks Coca-Cola and PepsiCo reported an increase in demand for food in the third quarter, which helped them to recover from an unsuccessful second quarter. Consumers have increased their purchases in stores and on online platforms, according to company representatives.

October 23_Sugar Market

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