The eyes of the sugar market are on Russia and the Ukraine. Both countries show a different market picture. Last season a lot of sugar beet was harvested and sugar produced in both countries. For Russia this means that it is less dependent on sugar imports. Ukraine can actually play a part in the world market.
The Russian sugar beet campaign for the 2016-2017 season was completed on March 4. In total, 47,5 million tons of sugar beet were harvested. The acreage has been on the rise again since 2014-2015 and amounted to more than 1,1 million hectares. The beet yield has also been on the rise since that period, with approximately 47 tons of beets per hectare. Sugar trading house publishes those figures ED&F Man.
So far, more than 6 million tons of sugar has been produced by the Russian sugar processors. That was 5,2 million tons last season. At that time, the acreage amounted to approximately one million hectares of beets. Not all beet molasses and syrup have been processed yet. The stock is thought to be good for another 150.000 tons of sugar.
By 2021, Russia would like to be self-sufficient in its sugar supply. With current production, that is a realistic goal. The country's sugar imports amounted to around 2016 tons in the 2017-30.000 season. That was 300.000 tons a season earlier and in 2011-2012 even more than 900.000 tons.
In addition to a greatly reduced interest from Russia, Ukraine is much more active in the export market. The country produced 2 million tons of sugar last season. However, comparable to previous harvests, the export level is much higher. In the last quarter of last year, it exported 300.000 tons of sugar. 25.000 tons is normal for the country during that period.
The area of sugar beet is not increasing significantly in the country. It is mainly the hectare yields that increase. Last season even set a record. There is a good chance that a lot of sugar will also be produced in 2017-2018. The biggest challenge for arable farmers is to keep sugar levels high. The weather is not always favorable for that. Last season, the start of the campaign was particularly unfavourable, as a result of which the average sugar content did not exceed 17 percent. Investing in better varieties is partly required.
Looking at the expectations for the acreage from 2017-2018, it is quite possible that Ukraine will once again enter the world sugar market. However, the erratic weather has an important finger in the pie. Not only during the sowing season, but also during the harvest. If winter sets in early, followed by warmer weather, the beets will rot and can be processed less efficiently. In addition, the sugar content decreases sharply. In the long term, it is likely that Russia and Ukraine will produce a surplus of sugar. Russia mainly sells them in neighboring countries. Ukraine can become a permanent player in the global sugar market.
© DCA Market Intelligence. This market information is subject to copyright. It is not permitted to reproduce, distribute, disseminate or make the content available to third parties for compensation, in any form, without the express written permission of DCA Market Intelligence.
