The Ministry of Agriculture proposed to ban the export of sugar from Russia until August 31 this year.

The Ministry of Agriculture proposed to ban the export of sugar from Russia until August 31 of this year. The ban will not apply to the export of this product to the EAEU states. The Ministry of Agriculture told Kommersant that, taking into account the forecast volume of production and the needs of the domestic market, by the end of the season the Russian Federation will be able to export about 200 thousand tons of sugar and agreements with the countries of the union provide for the export of exactly this volume. The situation in which officials have to regulate supplies manually was caused by a number of factors: growth in production, expansion of export geography and the solution of problems with logistics, payments and insurance that arose in 2022.

The Ministry of Agriculture has prepared a draft government resolution, which involves a ban on the export of sugar from Russia for the period until August 31, 2024 (the document is published on regulation.gov.ru). We are talking about cane and beet sugar, as well as chemically pure sucrose. The ban will not affect the export of sugar to the states of the Eurasian Economic Union (EAEU) – in this case, only a permit issued by the Ministry of Agriculture will be required.

As the department told Kommersant, this season sugar production in Russia could reach 6.8 million tons, which is 9.8% higher than last season. The positive dynamics are associated with the high sugar beet harvest: according to Rosstat, in 2023 it amounted to 53.1 million tons (the second result in the entire history of observations).

Let us explain that the demand for Russian sugar on the world market is supported by its availability. Partly because of this, the geography of supplies this season has expanded: now this product is imported by Turkmenistan, Afghanistan, Turkey, North Korea and Senegal. Traditional buyers of Russian sugar include the CIS countries, Mongolia and Serbia. Russian producers were helped to return to these markets after reducing their presence in them last season by solving logistics problems, overcoming difficulties with payments and reducing prices for supply insurance.

Increased production and stable demand contributed to an increase in export volumes: from the beginning of the season (August 1, 2023) to the end of February 2024, the Russian Federation, according to the Ministry of Agriculture, exported more than 700 thousand tons of sugar – this is 3.3 times more than during the same period. period last season. The bulk of the goods are exported by rail, some by road and by sea in containers.

By the end of the season, Russia can export about 200 thousand tons of sugar. The ministry considers this volume to be optimal, taking into account the needs of the domestic market (about 6 million tons per year) and “the need to ensure a sufficient level of sugar residues at the end of the current season.” The latter, let us explain, is necessary in order to avoid noticeable fluctuations in product prices.

In fact, the prepared draft resolution makes there is no alternative to the export of “surplus” (200 thousand tons) specifically to the EAEU countries, which is explained by Russia’s obligations to the members of the union. Agreements within the union involve supplies between countries within the volumes provided for in the forecast balances; they include the needs of the EAEU states for certain goods, including sugar. “The proposed regulatory measure will allow us to fully implement agreements on sugar supplies to our partners in the EAEU and ensure a stable situation in the domestic market,” concludes the Ministry of Agriculture.

Let us note that even before the possible ban, a significant share of Russian sugar exports fell to the EAEU countries, including Kazakhstan. Since the beginning of the season, more than 200 thousand tons of sugar have been sent there by rail, the Institute of Agricultural Market Studies reported last week.

Kristina Borovikova