'Sugar prices were not regulated before — this is a 'great innovation' of the current year'

'Sugar prices were not regulated before — this is a 'great innovation' of the current year'
Photo: Vladimir Zhabrikov / URA.RU

Sunflower exports in Russia almost doubled last year, and this is in the context of a 10% yield decline. Experts believe that this circumstance led to an increase in prices for sunflower oil. Sugar beet was planted by 19% less than the usual acreage, in addition, the year was not the most successful for the crop — so now, according to experts, sugar production in our country will fall. Read the details in the material of Realnoe Vremya.

Record sunflower exports

Prices for sunflower oil and sugar soared at the end of the year. The Russian authorities recommended that sellers adhere to the established prices. At the same time, the export of sunflower seeds almost doubled for the year, from 723 thousand tonnes to 1,375,6 thousand tonnes. It was more profitable for agricultural producers to sell their products abroad, at a higher cost.

“It is profitable to sell abroad, so our prices have crept up," said Kamiyar Baytemirov, the chairperson of the Association of Farmers of Tatarstan.

The sunflower crop for grain in 2020 (as of November 1) was collected (12,566 thousand tonnes) by 9,7% less than a year earlier (13,922 thousand tonnes). At the same time, the yield (in terms of per hectare) actually decreased by 13,1%, from 18,3 c/ha in 2019 to 15,9 c/ha. Considering that the acreage (8 544,8 thous. ha) of sunflower in 2020 in Russia practically did not change (-0,5%), we can talk about the natural character of decline in the yield.

“The market regulates itself in this way”

As for sugar beet, its export, according to the Federal Customs Service, did not exceed 30 kg in 2020, and in 2019 amounted to only 112 kg. By 34,9% less crops were harvested, or 28 546,8 thousand tonnes (in 2019 — 43 877,8 thousand tonnes). Last year's yield for sugar beet was also the worst in the last 3 years, namely 370 c/ha, when in 2019 the yield reached 479,6 c/ha.

This was confirmed by the director of Sovekon analytical centre, a leading Russian expert in the field of research in agriculture and food industry, member of the expert council under the Ministry of Agriculture of the Russian Federation, Andrey Sizov: “For sugar beet, the yield decline was due to unfavourable weather conditions”. Farmers themselves contributed — they allocated by 19,1% (or 219 thousand hectares) less of the sown area for sugar beet in 2020 than a year earlier (in 2019 — 1,145 thousand hectares). .

The expert attributed the reduction in crops to overproduction in previous seasons, which caused a sharp drop in sugar prices: “The market regulates itself in this way.”

“Decisions should be more economic in nature, not 'bureaucratic”

Speaking about the prospects of the market, Sizov notes that the medium-term sugar production in Russia will fall if the state continues to regulate the prices of the product:

“Sugar prices were not regulated before — this is a 'great innovation' of the current year. Before that, our sugar production was growing steadily. Last year's decline is a common market reaction. During the decade, sugar production was steadily growing. Now, due to the regulation of sugar prices, we will see the opposite trend — a decline in production," concluded Andrey Sizov.

Dmitry Gordeev, the press secretary of VNIIMP named after V.M. Gorbatov, sees the reasons for the reduction of processing capacity due to the bankruptcy of sugar producers:

“So the producers reoriented to other products and reduced the production of sugar beet. A number of fairly large manufacturers spoke about unprofitability in the current situation. As a result, we got an increase in sugar prices, which we are now seeing.”

Kamiyar Baytemirov believes that decisions are needed at the level of the government and the ministry of agriculture of Russia regarding the prices of the previous year: “Decisions should be more economic in nature, not 'bureaucratic'.”

By Yevgeny Khramov