Russia-Sugar Annual Report 2013
Report Highlights:
FAS/Moscow forecasts Russia’s sugar beet production in 2013 to fall by 18 percent from last year to 37 million metric tons (MMT). The lower forecast for the 2013 sugar beet crop is due to the expected decrease in sugar beet sown area from 1.14 million hectares to 1.0 million hectares as low sugar prices are expected to result in a shift in area to other grains and oilseeds.
Executive Summary:
FAS/Moscow forecasts Russia’s sugar beet production in 2013 to fall by 18 percent from last year to 37 million metric tons (MMT). Last year’s crop of 45.1 MMT, the second highest in the Russian history, was greater than Russia’s processors demand for sugar beets, and as a result a significant
portion of the sugar beet crop was left unprocessed and lost. The lower forecast for the 2013 sugar beet crop is due to the expected decrease in sugar beet sown area from 1.14 million hectares to 1.0 million hectares, while sugar beet yields are forecast to remain at the relatively high level of the last two years: 38-39 metric tons (MT) per harvested hectare. This high average yield forecast is based on the assumption that sown area will likely be reduced at less efficient farms with poorer yields, while sown area in large agro-holdings which typically use modern technologies and improved seeds and obtain higher yields is expected to remain steady.
Decreased domestic sugar beet production in 2013 is not expected to result in a corresponding significant decrease in beet sugar production in marketing year (MY) 2013/14, as production still should be sufficient to meet processors’ demand. The losses of sugar beets are expected to drop,
with the volume of beets sold and processed expected to remain at almost the same level as in MY 2012/13. FAS/Moscow forecasts domestic production of beet sugar in MY 2013/14 at 4.9 MMT (raw value) only 0.1 MMT, or 2 percent, lower that in MY 2012/13.
Sugar beet processing is seasonal, and begins in September and usually ends in January. Industry analysts report that domestic processors may process in this period 36-37 MMT. Recent production of sugar from beets has already surpassed the targets of Russia’s Food Security Doctrine, which requires Russia’s self sufficiency in sugar at 80 percent. The incentives for business to invest in expansion of sugar processing in Russia have been curbed by several factors. First, prices have been low in recent years as world production and trade in raw sugar has been stable and global stocks have been high (and Russian production has been very large). Second, competition from other sweeteners (both grain-based and artificial) in the world and inside Russian market has increased.
Imports of raw cane sugar are expected to rise in MY 2013/14 as a result of lower domestic beet sugar production and as processors build a buffer in case of production shocks. However, these volumes will remain far below the levels of nearly 2 MMT at the beginning of the decade.
FAS/Moscow forecasts imports of sugar in MY 2013/14 to increase to 1 MMT, from the estimated 0.7 MMT in MY 2012/13. These imports will include 0.9 MMT of raw sugar (cane), and 0.1 MMT of refined sugar (raw equivalent). Russia’s exports of sugar are forecast at 0.2 MMT (raw equivalent).
