The customs union between Russia, Kazakhstan and Belarus has confirmed that Russia will reduce its import tariff on raw sugar from $140 to $50 per tonne for a period of two months commencing 1st March 2011.
Following bad weather Russia is facing a reduced beet harvest and the revised tariff is to facilitate sugar imports without causing sharp price rises. Agflation and rising food prices have resulted in political instability in other countries.
Refineries in Russia had recently reduced white sugar production in anticipation of the decision.
Although the market is technically overbought which would normally indicate a possible reversal, at least in the short term sugar looks likely to make further gains due to supply concerns in Brazil and a harvest likely to end sooner.
A weak dollar and a rally in corn prices due to a worse than expected crop in the U.S. also supported sugar and ethanol prices. However, as open interest is lower in the midst of such a rally this could be an indication that once the rally has lost its steam there could be a reversal.
Posted in Ethanol, Sugar
Tagged brazil, brazilian sugar, crystal sugar, refined sugar, sugar cane, sugar futures, sugar guru, sugar importers, sugar mill, white sugar
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