USDA proposes to restrict the import of sugar from Belarus and Kazakhstan. According to the Ministry, the partners in the EEU duty-free import of raw sugar from Brazil and the EU, and then at bargain prices resell processed sugar Russia, causing sugar prices in the country are falling, and the domestic industry to lose 70-80 billion rubles. Kazakhstan and Belarus have assured that buying raw only for their own needs.
Russia may restrict the import of sugar from Belarus and Kazakhstan to support domestic producers. As stated by the Minister of agriculture Alexander Tkachev, the Russian sugar industry loses from the actions of Belarus and Kazakhstan in this market in the 70-80 billion rubles.
“Kazakhstan and Belarus duty-free import of raw sugar from Brazil and the EU, while Belarus will export about 250 thousand tons of sugar to the territory of Russia. A significant part of it produced from imported raw sugar. This leads to the losses of the Russian manufacturers”, – said the press service of the Ministry of agriculture.
According to the Agency, since the beginning of August to September, the price fell by 44%, sugar fell from 44 to 26 rubles. per 1 kg, returning to the level of 2014 prices.
“We are extremely concerned about, in my opinion, a hostile policy, the decisions of our colleagues from Belarus, Kazakhstan partly. Producing sugar at bargain prices, ruining our market, Russian, and Eurasian. Clearly, our farmers, our plants are suffering losses serious enough. In the whole industry today, we estimate the loss of about 70-80 billion rubles. This is a serious blow to the economy”, – said the TV channel “Russia 24”.
Last season Russia, thanks to the increase in the sugar beet harvest, came in first place in the world production of beet sugar (6.2 million tons), ahead of France, USA and Germany. This year, the sown area of sugar beet increased by 6%, it will collect 52 million tonnes of beet to produce up to 6.5 million tons of sugar, say in the Ministry of agriculture. Internal demand of the Russian population in the Sahara is about 5.6-5.8 million tons per year. Total imports last year was slightly above 500 thousand tons. According to Rosstat, in the first half of the year, Russia imported 130,000 tons of white sugar from the CIS countries.
Imports from Kazakhstan and Belarus, given its share in the total volume of sugar sales has no impact on the Russian market, says head of marketing Agency “Alekhine and partners” the novel Alekhin.
“The claims of agriculture must be understood not literally but as a message to the Belarusian and Kazakh authorities that they have shifted to Russian products.
While this is just a statement, and wait for concrete action is not necessary, but in the future the intervention of the authorities of Belarus and Kazakhstan and possibly the introduction against them of restrictive measures – the tightening of customs regulations, etc.”, – the expert believes.
All import duty in the EAEU is determined in accordance with the customs tariff, which is uniform for all. So, in Russia, and in Belarus there is a uniform import duty on raw sugar, which is also produced in those countries themselves. However, due to the fact that it is not produced in Armenia, Kyrgyzstan, and Kazakhstan for these countries there are quotas equal to the volume of domestic consumption, calculated on the basis of retrospective analysis explained “Газете.Ru” in the press service of the Eurasian economic Commission (EEC). “Exactly this amount of supply is zero customs duty. All deliveries above this amount are subject to customs duty, as in other countries of the EEU”, – stressed in the Department. The volume of raw sugar imports for these countries is small, added to the EEC.
According to the Institute of conjuncture of agrarian market (IKAR), in the 2016-2017 marketing year (August-July), Russia imported 288 thousand tons of white sugar and 25 thousand tons of raw sugar. In the 2017-2018 marketing year, imports are projected at 246 thousand tons. At the same time, as pointed out by ICARUS, import of white sugar no less than 70% comes from Belarus.
“Export of sugar from Russia very limited duty-free supplies of white sugar and raw sugar from third countries in the EEU countries (Belarus, Kazakhstan, Kyrgyzstan, Armenia) and the CIS. Is a potential sales markets of Russian sugar, where duty-free continues to be supplied with sugar from third countries, despite the “unified” rules of the game in the EEU”, – noted in IKAR.
According to the statistics of import supplies of the Russian Federation from States–members of the EEU in January-June 2017, from Belarus were delivered to 135 thousand tons of sugar ($67 million), which is 5% lower than the same period in 2016. During the same period, the supply of sugar from Kazakhstan to the Russian Federation is not fixed.
According to Rosstat, in August the average price of 1 kg of sugar on average in Russia amounted to 47.24 ruble, which is 21% less than in August 2016. Compared with July, the price of sugar in the last month of summer in the country fell almost on the ruble.
Belarus imports a minimal amount of raw sugar in case of shortage, these volumes can not adversely affect the sugar industry in the EEU and Russian producers, assured RIA Novosti the representative of the concern “Belgospischeprom”. In accordance with customs regulations in the EEU, products from imported raw sugar can only be exported to countries outside the Union and in the framework of the EAEU Belarus can only supply beet sugar of own production, he recalled.
In 2017, Belarus in the current year it is planned to collect at least 4.5 million tons of sugar beet, which is 200 thousand tons more than last year, and producing not less than 600 thousand tons of sugar. Exports in 2017 could increase by 10% to 381.5 thousand tons.
Kazakhstan is a quota on the import of raw sugar from third countries only for recycling for your own needs, it re-exports of sugar to Russia, assured the Minister of national economy of Kazakhstan Timur Suleimenov.
“With the formation of the Customs Union, the Eurasian economic Union, all countries have taken certain transitional provisions including transitional provision that we have exemption for the import of cane sugar, raw sugar from third countries. We have it and until 2018” – quoted by TASS Suleimenov.
Excess sugar is now observed not only in Russia but also in foreign markets, that has led to a decrease in market value by almost 30%, this means that at least until the end of the year producers will work on the verge of profitability, not only in Russia, says the analyst of “ALOR Broker” Kirill Yakovenko.
In the future the Russian market will grow the supply of cheap cane sugar from third countries, whose producers are also faced falling prices and oversupply. Because of this, according to analysts, the Ministry of agriculture in the near future can go to the program implementation of protectionist measures to protect domestic production.
Likely to impose restrictions on imports, he said.
The Ministry of agriculture has asked the Ministry of economic development of Russia with a request to consider the site of the Eurasian economic Commission the question of the legality of import without payment of customs duties sugar by residents of the republics of Kazakhstan and Belarus, and to offer the Belarusian and Kazakh side to refuse to import raw sugar from foreign countries and purchase the Russian beet sugar for further processing, said the press service of the Ministry of agriculture.
The Agency also is preparing a proposal to the Eurasian economic Commission about the withdrawal of white sugar from the list of goods permitted to be placed for recycling in FEZ (free economic zone) and STS (the free customs warehouse).
The Ministry said that requests to the office have not yet been reported.
Russia itself delivers sugar to Kazakhstan, Azerbaijan, Tajikistan, Belarus, Kyrgyzstan, Afghanistan, Georgia, Syria and Turkmenistan. At the end of last season we exported 340 thousand tons of Russian sugar. Export potential this year, the Ministry of agriculture is estimated at 700-900 thousand tons of sugar.