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INTERVIEW-UPDATE 1-Russian sugar output, imports seen rising

Published 09/23/2009, 10:29 AM
Updated 09/23/2009, 10:33 AM

* 2010/11 beet sugar output seen rising to 3.3 mln tonnes

* 2010 raw sugar imports seen rising to 2 mln tonnes

* No rise in raw sugar import tariff expected from December

(Adds details, quotes, background)

By Aleksandras Budrys

MOSCOW, Sept 23 (Reuters) - Russia could import 75 percent more raw sugar next year, as stocks decline, and refine more sugar from domestic beet as farmers devote 10-15 percent more land to the crop, the head of the Russian Sugar Producers' Union said.

The world's second biggest buyer of sugar is unlikely next year to again impose a seasonal increase in its import tariff from the current level of $165 per tonne, as world prices are high enough, said Andrei Bodin, the chairman of the industry lobby group.

"(Raw sugar) imports may rise to about 2 million tonnes (in 2010), as stocks are shrinking," Bodin told Reuters in an interview on Wednesday.

"We have imported 1.15 million tonnes of sugar so far since the start of the (2009) year and we do not expect any imports until the end of the year," he said. Russian sugar refineries are now busy processing this year's domestic sugar beet crop.

Raw sugar futures have doubled this year, peaking in early September at a 28-1/2-year high, as the world's largest consumer of the sweetener, India, has swung from being a net exporter to an importer. Bodin said high international prices made it unnecessary for Russia to apply a high seasonal tariff of $220 per tonne of raw sugar. The tariff, imposed by Russia in the last couple of years from December to May, is designed to protect domestic producers.

"We do not plan to set a seasonal tariff as world prices are high," Bodin said.

MORE BEET SUGAR

Bodin forecast Russia would increase beet sugar production to 3.3 million tonnes in the 2010/11 crop year from the 3.05 million tonnes it expects to produce in the current season. The season normally ends in January or February.

"We expect farmers to increase the sowing area by some 10-15 percent," Bodin said.

The union's 3.05 million-tonne forecast for this season shows a decline from last year's record 3.55 million tonnes, due to a decline in the sown area and lower yields this year.

Russia has sown 822,700 hectares to sugar beets this year, down from 867,000 hectares in 2008.

The union estimates sugar stocks in Russia carried over from 2008 at 2.7 million tonnes at the start of January 2009 and expects them to shrink to 2.07 million tonnes by the end of December.

Bodin also said he expected the responsibility for setting customs tariffs to be assumed by the Commission for Protective Measures in Foreign Trade of a new customs union, which is due to be created by Jan. 1, 2010.

The commission is being formed as part of Russia's plan to create a customs union with ex-Soviet neighbours Belarus and Kazakhstan. Bodin said the commission's decisions would be obligatory for all three countries. (Editing by Anthony Barker)

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