Russian white sugar output from imported raw and domestic beets is set to decline this year due to insufficient government measures aimed at protecting domestic beet growers and refiners, an analyst said on Tuesday.
"A floating tariff on raw sugar imports combined with semi-transparent borders and free-trade regime with the Commonwealth of Independent States have caused chronical losses to legitimate raw sugar business," commented Yevgeny Ivanov of the Institute for Agricultural Market Studies.
Ivanov wrote in a research note that output of sugar from imported raw sugar declined by a half, or by 1.268 million tonnes in the first six months of this year from the same period of 2003.
At the same time imports of white sugar from the CIS including semi-legal and illegal shipments rose by 185,000 tonnes to 490,000 tonnes.
White sugar is liable to an import tariff of $340 per tonne this year. But beet sugar produced inside the Customs Union of Russia and some other post-Soviet states - Belarus, Kazakhstan, Kyrgyzstan, and Tajikistan - can cross borders duty free.
Sugar producers have complained that some white sugar refined from cane raws is imported into Russia as beet sugar.
Ivanov believes that sugar refining from domestic beets may decline to 1.74-1.83 million tonnes this year from 1.93 million last year.
"In 2004, for the first time in the last four years the area sown with sugar beets declined by six percent, which was accompanied by a decline of investments," he said.
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