The government intends to ban the export of one product from Russia: what is the reason

The Ministry of Agriculture has prepared a draft government resolution on a temporary ban on the export of sugar from Russia until August 31. It will be prohibited to export beet and cane sugar from the country, as well as chemically pure sucrose in solid form, according to the document, which has yet to be adopted.

But, as you know, there are no prohibitions without exceptions. This measure will not affect sugar supplies to the EAEU countries. Although, to get the go-ahead to export in this direction, you will need an export permit from the Ministry of Agriculture.

The ban is due to the fact that since the fall of last year, supplies of this product abroad have intensified. According to the Institute of Agricultural Market Studies (IKAR), 83 thousand tons were shipped by rail in November alone. And in total, for the period from August 2023 to mid-February this year, exports amounted to 442 thousand tons – compared to 164 thousand tons for the same period last season.

The geography of supplies is very wide: CIS countries, North Korea, Mongolia, Afghanistan, Turkey, Serbia… Sellers were so keen on exporting sugar that they even used grain hopper cars for transportation. Let us recall that quite recently, at a meeting between Vladimir Putin and farmers in the Stavropol Territory, the head of the Association of Grain Exporters, Eduard Zernin, complained that Russia could not increase grain exports due to a lack of trains. When heading to the port of Novorossiysk, the turnaround time for wagons has increased from 22 to 26 days, creating an artificial shortage. The hopper cars themselves have risen in price by 67%.

In general, it seems that all efforts and carriages were devoted to the export of sugar. And now there is a danger that before the new harvest we will not have enough transitional reserves for the domestic market. The sweet product is mainly exported by rail, although partly by road and very small volumes by sea.

Last year, Russia produced 6.6 million tons of beet sugar – 0.7 million tons more than in 2022. According to Rusprodsoyuz, annual consumption of this product is 5.8 million tons. Self-sufficiency of Russians in sugar is 106%, therefore no one prohibits the export of surplus abroad. But, as it turns out, not at such a rapid pace. Therefore, the decision of the Ministry of Agriculture seems quite timely. We know what happens when traders recklessly export gasoline and diesel fuel: domestic shortages and rising prices arise.

It should be taken into account that our farmers, although we fully meet our domestic needs for sugar, are only 2.6% supplied with domestically produced sugar beet seeds. The remaining volumes (97.4%) are purchased via import. And we really need transitional reserves.

Moreover, according to analysts, in 2024 the world is expected to experience a shortage of sweet products and an increase in the price of raw sugar by 19%. It is not surprising that domestic exporters decided to take advantage of the moment and “cut” profits. Although our consumer market is completely calm. After the maximum price of sugar in April 2022 (about 88 rubles per kilogram), it is becoming cheaper, and today a kilogram bag costs about 70 rubles.

Cane sugar, of course, is not grown in Russia, but we have all seen it on store shelves. It has a characteristic brown color due to the presence of molasses. It is believed that cane juice is healthier than beetroot because it contains more microelements – zinc, manganese, copper.

We buy raw sugar in Cuba and Brazil – about 3 million tons per year. But if these volumes are translated into pure product, the result will be about 500 thousand tons. Compared to the volumes of beet (6.6 million tons), this is quite a bit – rather exotic. But, as can be seen from the statistics, we also successfully sell it abroad.

Rusprodsoyuz assured us that the current sugar production volumes are quite sufficient to cover the needs of the domestic market. “In January 2024, sugar production amounted to 548 thousand tons – 48.2% higher than in January 2023,” the association reported.

In short, Russian experts are confident that we will drink tea with sugar, especially if we close exports.