August 6 2002, 10:55 Vedomosti

Russian sugar market overview: Sugarbeets are encouraging

Prices shot up almost in all parts of the country early last week. However they turned down mid-week and are still going down at the moment. On Monday sugar cost US$439 per MT in Moscow, US$450 in St. Petersburg, US$450 in Ural region and US$477 in Siberia. The lowest prices were in sugarbeet-producing areas - US$420 in southern and US$430 in black-soil regions. Price fluctuation during the week in review did not exceed US$5.

620 thousand tons of import raw cane sugar were discharged during July, yet at a slower pace towards the end of the month. Some 150 thousand tons of raw cane sugar are still waiting for unloading in ports. Considering the fact that raw sugar processing season is traditionally completed in August, this month's imports can be projected at 200 thousand tons. Especially as raw imports in August are subject to import tax at seasonal rate of US$150 per ton.

The pace of sugar refining is going down as well. This year sugar refineries' stocks have been the lowest on record, decreasing over the first half-year from 400 thousand tons to 100 thousand tons, while in 1999-2001 this indicator was at the level of 500-600 thousand tons in summer months.

Meantime, sugarbeets harvesting campaign forecasts are quite optimistic. This year increased acreage along with expected enhanced quality of beets due to higher sugar content and more massive root, allows to forecast the yield to be higher. Last year beet sugar production totaled 1.6 million tons. This year Russian refineries may increase this indicator by 10-15 percent. Quantity of sugarbeets to be stored is forecast at about 12.8 million tons.

Though downward trend in sugar market is expected to continue this week, further supplies cutback may result in local shortfalls.