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Sugar scenario in CIS countries:
Andrey Bodin
Eurasian Sugar Association
on the way to self-sufficiency
Ukraine
Tajikistan
Azerbaijan
Uzbekistan Turkmenistan
Moldova
2
EAEU
Commonwealth of Independent States (CIS) consists of 11 countries
• Population 277 mln people
• Area 20,99 mln km² • Sugar consumption 9.27 mln t • Sugar production 9.3 mln t - beet 8.1 mln t - raw 1.18 mln t
Belarus
Kyrgyzstan
Kazakhstan Armenia
Russia
CIS
Customs regulations in CIS countries differ
3
Countries Sugar sufficiency Mechanism of customs tariff regulation
Russia, Belarus, Kazakhstan, Kyrgyzstan,
Armenia
High level of self-sufficiency
Common customs tariff, the removal of sugar from free trade regime
Ukraine High level of self-sufficiency
High customs duties on sugar and raw sugar, the removal of sugar from free
trade regime
Moldova High level of self-sufficiency
Customs duties on sugar and raw sugar, special protective measures
Azerbaijan, Tajikistan,
Turkmenistan, Uzbekistan
Low level of self-sufficiency,
dependence on import
Low custom duties
The biggest influence to the cis sugar market have the
sugar producers from Eurasian economic union:
Russia,
Belarus,
Kazakhstan,
Kyrgyzstan
Armenia
4
Eurasian Economic Union (EAEU) was established in 2010
5
77% of CIS beet sugar will be produced by EAEU countries in season 2016/17
Belarus
Kyrgyzstan
Kazakhstan
Armenia
Russia
• Population 183 mln people
• Area 20.22 mln km² • Sugar consumption 6.31 mln t • Sugar production 6.5 mln t - beet 6.35 mln t - raw 0.15 mln t
EAEU
Sugar policy in CU countries
Import Duty
White sugar USD340/mt
Raw sugar USD140 -250/mt
6
DAD
Exemptions:
Kazakhstan: import duty for raw sugar - 0% till 2019, import duty for white sugar – 0%, bonded warehouses till 2017;
Armenia: since 1.1.2015 import duty for raw sugar - 0% till 2025,
import duty for white sugar (4,000 mt) – 10% for 2015-2016;
Kyrgyzstan: since 2015 for 5 years – the privilege to import up to 100 thousand tons of raw sugar without duty
Customs regulations in EAEU countries
In EAEU countries beet sowing area has increased by 12% since 2013
7
1160 1292
1143
906 919 1022
1110
97
101
98
101 104
102 98
0
200
400
600
800
1000
1200
1400
1600
2010 2011 2012 2013 2014 2015 2016
Th
ou
san
d h
a
Russia Belarus Kazakhstan Kyrgyzstan
12
11
1246
1013
1409
1273
1135
1231
1007
Sugar beet areas in EAEU may increase Up to 10% in 2020
8
1160 1292
1143
906 919 1022
1110 1200
97
101
98
101 104
102 98
110
0
200
400
600
800
1000
1200
1400
1600
2010 2011 2012 2013 2014 2015 2016 2020
Th
ou
san
d t
on
s
Russia Belarus Kazakhstan Kyrgyzstan
12
11 1246
1013
1409
1273
1135 1231
1007
20
20 1350
10%
Sugar yield may reach average 6,5 tons per 1 ha by 2020 in EAEU countries
2.2 2.2
2.9
4.2
2.1
2.6
4.6
6.0
2.3 2.6
4.9
5.5
2.1
4.3
5.0
5.7
3.3
5.5
6
6.5
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
Kazakhstan Kyrgyzstan Russia Belarus
Suga
r y
ield
, to
ns/
ha
2010 2012 2014 2016 20209
Increase in sugar yield per 1 ha to be achieved by:
Use of new hybrids of sugar beet seeds;
Improvements in agrotechnology;
Further modernization of sugar factories
10
Sugar factory capacities increased by 20% since 2010
305 322 332 341 349 354 360
437
27.5 28 29.6 30.6 32.7 33 33.4
48
22.5 22.5 22.5 22.5 22.5 22.5 22.5
27
361 378 390 400 410 415 421
522
0
100
200
300
400
500
600
2010 2011 2012 2013 2014 2015 2016 2020(forecast)
Th
ou
san
d t
on
s o
f b
eet
per
day
Russia Belarus Kazakhstan Kyrgyzstan
11
Sugar factories capacities in EAEU are expected to increase by 20%
305 322 332 341 349 354 360
437
27.5 28 29.6 30.6 32.7 33 33.4
48
22.5 22.5 22.5 22.5 22.5 22.5 22.5
27
361 378 390 400 410 415 421
522
0
100
200
300
400
500
600
2010 2011 2012 2013 2014 2015 2016 2020(forecast)
Th
ou
san
d t
on
s o
f b
eet
per
day
Russia Belarus Kazakhstan Kyrgyzstan
12
20%
Beet sugar production increased by 72% within 6 years
3659
5266 5437
5046 5123
5758
6350
0
1000
2000
3000
4000
5000
6000
7000
2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17(forecast)
Th
ou
san
d t
on
s
Russia Kazakhstan Kyrgyzstan Belarus
consumption
13
More than 500 thousand tons of sugar EAEU countries will have to export by 2020
3659
5266 5437 5046
5123 5758
6350 7000
0
1000
2000
3000
4000
5000
6000
7000
8000
2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17(forecast)
2020(forecast)
Th
ou
san
d t
on
s
Russia Kazakhstan Kyrgyzstan Belarus
14
9%
Potential surplus 500 th. tons
consumption
Historically high sugar stocks in EAEU countries expected in 2016/17
0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
1
aug sep oct nov dec jan feb mar apr may jun jul
% o
f co
nsu
mp
tio
n le
vel
2014/15 2015/16 2016/17
70-80 % of consumption level
15
16
80 50
180
300
100 120
27
40
240
50
0
100
200
300
400
500
600
700
800
900
2015/16 (rawsugar)
2016/17 (rawsugar)
2015/16 (whitesugar)
2016/17 (whitesugar)
Th
ou
san
d t
on
s
Armenia
Belarus
Kazakhstan
Kyrgyzstan
Russia
As a result – decrease in raw sugar and white sugar import
827
150
210
No import sugar needed
0
430
450
470
490
510
530
550
570
590
610
630
650
670
690A
ugu
st
Sep
tem
ber
Oct
ob
er
No
vem
ber
Dec
emb
er
Jan
uar
y
Feb
ruar
y
Mar
ch
Ap
ril
May
Jun
e
July
USD
/t (
excl
. VA
T)
2015/16
Factors influencing local sugar price trends
17
Sugar beet processing Sowing campaign
430
450
470
490
510
530
550
570
590
610
630
650
670
690A
ugu
st
Sep
tem
ber
Oct
ob
er
No
vem
ber
Dec
emb
er
Jan
uar
y
Feb
ruar
y
Mar
ch
Ap
ril
May
Jun
e
July
USD
/t (
excl
. VA
T)
2015/16
2016/17
This year domestic sugar prices depend on the world white sugar market
18
Export price support
100$
Contract №5 (White Sugar)
488
500
540
546
570
590
630
640
Raw Sugar (NY #11)
Russia
Armenia
India
Kazakhstan
White Sugar (London #5)
Kyrgyzstan
Belarus
19
EAEU white sugar is competitive for export this year
Ukrainian sugar remains competitive in CIS countries in 2016/17
Moldova Ukraine
Sowing area
Surplus
Production forecast
Annual consumption
Current price
292 th. ha
1850 th. tons
1600 th. tons
250 th. tons
430 $/t
24,2 th. ha
100 th. tons
80 th. tons
20 th. tons
590 $/t
20
Four CIS countries are net sugar
640
520
690
660
Uzbekistan
Turkmenistan
Tajikistan
Azerbaijan
USD/Tonne
White sugar prices
c Overall sugar, th. t
Sugar consumption, th. t
Demand, th. t
Azerbaijan 330 250 80
Tajikistan 0 120 120
Turkmenistan 30 100 70
Uzbekistan 580 550 30
21
Sugar by-products play important
role in economics of sugar factories
Total export revenue in 2015 exceeded 145 mln USD
Beet pulp pellets (BPP)
1,0 mln tons 110 mln USD
Molasses, 440 thousand
tons 35 mln USD
22
EAEU is net exporter of sugar by-products
23
15
85
13
72
13
00
12
53
96
5
73
4
59
6
50
8
40
6
38
7
0
200
400
600
800
1000
1200
1400
1600
1800
10
90
0
41
00
31
00
28
72
23
00
22
00
19
20
15
00
14
20
10
65
10
30
0
2000
4000
6000
8000
10000
12000
BPP, thousand tones Beet molasses, thousand tones
8/1 bld. 1, Skatertny Lane, Moscow, 121069, Russia
tel.: +7 (495) 690 22 01, fax: +7 (495) 690 22 14
e-mail: [email protected]
Andrey Bodin
Executive Director
THANK YOU!
Eurasian Sugar Association