MECAS(12)06 – Developments and Drivers of the Sugar Market in CIS Customs Union Countries - English
Publisher: International Sugar Organisation
Format: digital download (PDF), 11.7” × 16.5”
Publication date: 2012
For nearly two decades after the collapse of the Soviet Union, Russia and the neighbouring countries were among the main destinations for sugar traded internationally. The situation changed radically in 2011/12 with bumper crops in both Russia and Belarus. The countries of the CIS Customs Union, a new trade bloc formed by Belarus, Kazakhstan and Russia in 2009, have radically improved their level of self-sufficiency in sugar to about 90% with an expected net-import demand of less than 0.5 mln tonnes. But can the countries in question maintain and continue to further expand their beet sugar production? What are their import and export prospects in the course of the current decade?
We begin this paper by presenting an overview of the common sugar market of the CIS Customs Union countries. The analysis continues by examining the situation in the individual Customs Union member-countries, starting with Russia, by far the largest producer and consumer of sugar in the Customs Union. The ISO analyzes production and consumption trends in Russia with a special focus on the sugar regime and the subsidies to beet growers and processors. The third and fourth chapters are dedicated to an analysis of major trends and future prospects for sugar in Belarus and Kazakhstan. Finally, the ISO provides an assessment of the Customs Union's sugar supply and demand in coming years, as well as forecasts for the region’s future role in the international sugar trade.
The study suggests that the bloc will continue to expand further beet sugar production. In the case of Russia, an increase in sugar output to 5.4 mln tonnes by 2020 targeted by the government and the industry is a challenging but doable task. The same comment can be made about sugar production plans of Belarus, where output is expected to grow by 20% to 720 thousand tonnes. Even in Kazakhstan, the “weakest link” in the CU sugar economy, gradual improvements in sugar production to about 45 thousand tonnes are envisaged. In a nutshell, the ISO expects the CU countries to produce about 6.265 mln tonnes as against forecast consumption of 6.6 mln tonnes by 2020. With only a minimum growth projected for consumption, net-import demand is expected to reduce to 345 thousand tonnes.
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