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.
With Brazil unlikely to ease sugar market supply concerns in the short term and its rising demand for ethanol India’s sugar exports under Open general Licence (OGL) may hold the key to market supply and consequently an easing in sugar prices which currently stand at near 30 year highs.
With up to 25% of Australia’s sugar crop lost to cyclone Yasi and tight global supply, India may be pivotal to the market establishing whether the decision recently announced by India approving 500,000 tonnes of sugar exports under its sugar OGL is to be ratified. The decision has been referred by a government keen to ensure that sufficient supply exists for domestic consumption before permitting such exports to proceed. A review of the decision and its possible ratification are yet to take place.
The EU is to permit sugar imports over and above the national quotas set for EU states. Raw and white sugar is to be authorised for import under reduced duty. A tender is likely to be announced shortly specifying the quantity of sugar to be imported. Although it is expected that the EU may authorise the import of approximately 500,000 tonnes of out of quota sugar.
The usual 500 Euro per tonne duty on this out of quota sugar will not apply. The decision is not yet EU policy but is expected to be announced shortly.
Posted in Sugar
Tagged EU out of quota sugar, EU sugar, EU sugar duty, EU sugar quotas, raw sugar, sugar export, sugar exports, sugar guru, sugar imports, sugar supply, white sugar
Queensland, where 90% of Australia’s sugar crop is grown is likely to face cyclone Yasi shortly. Queensland Cane Growers association announced that at least a couple of districts would be affected, falling in the expected path of cyclone Yasi. A threat exists to 25% of Australia’s sugar crop or over 8 million tonnes.
Sugar futures are down following rallies to near 30 year highs last week. However, supply is tight and provides support to prices despite raw sugar futures correcting by 4%. The cyclone and uncertainty over the size of Indian exports continue to ensure supply tightness.