Supply Chain

Russia's Sugar Production To Decline In 2020: IKAR

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Russia's sugar production is expected to decline to 5.8-6.4 million tonnes this year, from 7.8 million tonnes in 2019, the Interfax news agency reported, citing an estimate by IKAR agriculture consultancy.

Russia has doubled sugar output over the past decade to reduce its reliance on imports, and the resulting fall in domestic prices has pressured producers' profitability.

Farmers reduced the area sown with sugar beet to 932,200 hectares this year from 1.1 million hectares last year as sugar refining factories in several regions were loss-making amid oversupply.

Cold weather and hail in several regions in spring will also be a factor in the lower crop this year, Interfax quoted IKAR as saying.

Sugar Exports

Russia began exporting sugar a few seasons ago, but mainly to neighbouring former Soviet republics, and is still producing more than it consumes and exports each year, meaning that the stockpile is rising.

Russia's sugar stockpile was at 2.4 million tonnes at the end of June, up from 1.9 million tonnes a year earlier, IKAR told Interfax.

The country's agriculture ministry has asked independent farmers to avoid sowing a wider area with sugar beet until Russia further develops exports.

IKAR sees Russia's sugar exports this season, which runs until the end of July, at more than 1.45 million tonnes, Interfax said.

Retail domestic demand will be lower than usual in the coming months after a spike in demand from Russians spooked by the coronavirus epidemic in March, IKAR added.

News by Reuters, edited by ESM. Click subscribe to sign up to ESM: European Supermarket Magazine.

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