Sugar rises in price. In Russia, sugar began to rise sharply: and all because of a neighboring country
According to the Ministry of Agriculture of Russia, a noticeable increase in wholesale prices for such an important product as sugar has been recorded in the country since September. Such data are given in the publication of RBC with reference to the report of analysts of the Ministry of Agriculture of Russia. The department reports that since the beginning of October, wholesale prices for sugar in the Southern Federal District alone have increased by almost one and a half times compared to the same period in 2017. Since January of this year, product prices have increased in exact terms by almost 44%.
The most surprising fact is that neither the expert community, nor even the market participants predicted such a sharp dynamics in the rise in sugar prices, which means that the process becomes uncontrollable.
Experts name a poor harvest of raw materials - sugar beet - among the most noticeable reasons for the sharp rise in sugar prices. This is also discussed at the Institute for the Conjuncture of the Agrarian Market of the country. It is noted that this year the area under sugar beet crops was 6% lower than a year earlier. The situation was aggravated by the low yield, which, in comparison with 2017, decreased by a quarter and amounted to just over 370 centners per hectare. Market participants confirm that a month ago the market started to panic in connection with the expectation of low sugar beet harvests in the Kuban.
Experts now expect that the country's sugar production this season will be below the forecast level of demand. So, if sugar consumption in Russia is projected at 6.1 million tons, then no more than 5.8 million tons of the product itself will be produced. In principle, taking into account last year's stocks and imports, which in total amounts to about 500 thousand tons, analysts do not expect a serious shortage in the market. Against this background, the country could even send up to 200 thousand tons for export. But the problem lies in the potential strategy of the manufacturers. Experts, for example, do not exclude that in the current conditions they will try to ship goods to neighboring Kazakhstan, where there is also a deficit.
It is noteworthy that since August of this year, the rate of preferential duty-free import of sugar within the EAEU borders has been abolished - now raw sugar is taxed at a rate of $ 340 per ton. This decision could be motivated by a variety of considerations. However, analysts attribute it to the fact that producers had previously predicted a deficit in the sugar market. The Ministry of Economy of Kazakhstan ignored this moment - the ministry rejected the negative scenario and stated that there was no probability of price increases. Now the Kazakhstani deficit and, accordingly, the rise in prices in the market of this country will certainly attract the attention of Russian producers, which may lead to the same deficit in the domestic market.
As of now, as evidenced by the data of the Ministry of Agriculture of Russia, domestic retail prices for sugar in October increased by 17.6% from the beginning of last year and only 5% compared to last October. However, experts believe that the rise in sugar prices in Russia will continue. For example, last month, Russian retailers complained that the purchase prices for sugar rose sharply. It was possible to keep prices at the same level only thanks to the actions of individual retail chains, which softened the blow to the consumer, but they still will not keep prices at an acceptable level for a long time.
15:16 - REGNUM There may be price increases in the sugar market, the reasons for which are not obvious: this was the case in the 4th quarter of 2014, and this is the case now. The reason is that the market is oligopoly - it is dominated by three companies. However, other factors could have influenced prices, the respondents said. IA REGNUM experts.
Head of projects of the practice of agro-industrial complex of the consulting group "NEO Center" Maxim Nikitochkin recalls that 50% of the sugar market in Russia is controlled by three companies - Prodimex, Rusagro and Dominant. Two more companies - "Syukden" and "Agrocomplex Tkacheva" each have 25% of the market.
“Because of this, sometimes not quite obvious price increases are observed in the sugar market - both in the 4th quarter of 2014 and now. The formal reason for the increase in sugar can be called the news about the shortage of sugar in this marketing year - both global and Russian. However, this reason is rather formal, because in Russia this deficit is small (about 200 thousand tons) and it is covered by significant carry-overs.
The expert believes that the wholesale prices of producers in the next six months will be in the corridor of 32-36 rubles / kg, and retail prices - 42-46 rubles / kg. As for the rise in gasoline prices and the increase in VAT from 18% to 20%, these factors will not greatly affect sugar - for sugar, the increase in VAT will be less than 1% of the cost price.
According to the expert of the International financial center» Gaidar Hasanova If sugar prices rise, it will be an artificial increase due to overproduction and problems with profitability.
“For the 2017-2018 season, the yield was 500 c / ha, but due to low prices for sugar, the profitability of production could decrease. And the costs of growing beets increased, which could lead to almost zero profitability of production.
If we recall the period 2015-2016, then the relatively high prices for sugar at that time stimulated agricultural producers to increase processing capacities and increase the sowing of sugar beets - and in 2017 the sown area in Russia increased by 8% - to 1.2 million hectares. Currently, as a result of overproduction of sugar and low prices for it, there may be a reduction in sown areas by 9% - to 1.1 million hectares.
But despite this, the overproduction of sugar may persist due to the high productivity of this industry in Russia. At the same time, sugar production for the 2018/2019 season may amount to 6.5 million tons, and Russia's export potential may amount to 0.9 million tons.
In September, the media reported that the rise in sugar prices may be associated with a poor harvest this season due to drought in the southern part. Russian Federation... Especially in Krasnodar and the Rostov region. But most of the production falls on the central part of the country - about 64%, while there were no problems this year in this zone.
I believe that if sugar prices rise, it will be an artificial increase, since high overproduction combined with low sugar prices in the world can reduce the profitability of production. And export problems will aggravate the situation even more - these are low world prices for sugar combined with high competition, and logistical problems (lack of wagons, overloading of ports). "
Director of the company "Your Financial Partner" Igor Ponomarev believes that the increase in wholesale prices for sugar was influenced by a decrease in the harvest: according to fresh data from the Institute for Agricultural Market Studies, the production of beet sugar at the end of the 2018-2019 season will amount to 5.5-5.8 million tons, while IKAR experts expected production at the level 5.8-6.0 million tons.
“According to the Ministry of Agriculture, the area of sugar beet harvesting this year has decreased by as much as 6% - to 1.1 million hectares. By October 18 of this year, the harvesting campaign was completed by 80%, 31.4 million tons of sugar beet were extracted. By October 15, Russian sugar factories produced about 2.6 million tons of sugar, which is less than the level of the same date in 2017.
As a result, the drop in production increased the wholesale prices for sugar. Let's remind that due to unprecedented production last year sugar fell in price by more than a quarter. As a result, prices rose sharply in the last month of 2018. For example, if at the end of August in the Krasnodar Territory wholesale prices for sugar did not exceed 26 rubles. per 1 kg, then by mid-September they jumped to 37 rubles. for 1 kg.
Retail, on the other hand, clearly and instantly follows wholesale. Moreover, each participant in the chain from producer to consumer is already trying to take into account in the price both the upcoming increase in VAT and the current increase in fuel prices, which is taken into account in transport costs. According to our forecasts, this is not the limit - by the end of the year the price will show two or three breakthroughs ”.
As for the growth in prices for fuels and lubricants, electricity tariffs and an increase in VAT, then, according to Marina Petrova, deputy chairman of the MCCI committee for the development of entrepreneurship in the agro-industrial complex, they always affect the final cost of agricultural products.
“The rise in prices is always influenced by the growth in the cost of fuels and lubricants, electricity and, of course, the increase in taxes. Diesel fuel and gasoline, which are needed for feed, and for the delivery of raw materials, and then for finished products, have already risen in price.
Also, due to the ruble exchange rate, the main foreign ingredients (equipment, packaging, cars, software and computers) have risen in price. Next year, VAT is expected to increase from 18 to 20% and this will affect the cost of equipment and materials, which means the cost of agricultural products.
In addition, if we look at the situation over the past nine months of 2018, we will see that during this time retail prices for butter increased by 5%, drinking milk - by 1%, yoghurts - by 6%, cottage cheese - by 3%. , curd snacks - by 9%, rennet cheeses (hard and soft) - by 2%.
There was also an increase in prices for chicken meat, and I believe that prices will continue to rise both at the end of this year and at the beginning of next year. So, in the next six months we will see further growth the cost of dairy products - from 4-5% for basic and socially important dairy products to 10-15% for milk-intensive products (butter and cheese). As for meat, chicken will grow by 5-7%, while pork and beef may rise in price by 10% in the next 6 months. "
The managing partner of the 2K auditing company considers the issue of energy tariffs key for farmers Tamara Kasyanova. Development Agriculture is significantly slowed down due to high energy tariffs, and they increase the final cost of production, for which the consumer pays.
“In the summer, a bill was introduced to the State Duma to support farmers by establishing preferential tariffs for energy resources for them. Let's hope that the tariffs will be reduced, because in February Dvorkovich said that the government could not do this, otherwise there would be another cross-subsidization, that is, the load on other groups of payers would increase.
In general, the price of electricity is mobile from region to region - NP Market Council sets prices on a monthly basis based on the conditions of its production, delivery and sale. Much also depends on the efficiency of the power transmission systems.
We know how much the chains are worn out in a number of regions, so the prices for it can be very different. In a number of regions, tariffs may be reduced due to the repair of power grids and an increase in the efficiency of their work. "
The sphere of the agro-industrial complex is very complex, and its viability depends on many factors. Not only utility tariffs, but also Russian Railways tariffs, gasoline prices and other issues.
In general, all tariffs will most likely grow, but at the same time various programs for state support of the agro-industrial complex will work, the expert is sure.
This week, two alarming news came at once for the "batch of the refrigerator": the Russians are expecting a rise in prices for bread and sugar. At first, Krasnoyarsk bread producers were afraid that the price for their entire range would rise by 8-12%, and then the Ministry of Agriculture published an analytical material about a sharp rise in wholesale prices for sugar. Bread and sugar are the base grocery basket all Russians. Is it really necessary to prepare for the fact that a sharp jump in prices for these basic products and their derivatives (confectionery, canned products) will be felt by all Russians? With such a question “ New Newspaper»Turned to industry experts.
Evgeny Ivanov
leading expert of the Institute of Agricultural Market Studies
"The price increase will be moderate."
- Sugar is a typical commodity market, and wholesale prices for it can change twice in six months in any direction. In two waves in the fall of 2016 and the fall of 2017, wholesale and retail prices sagged and in 2018 they were at the lowest level for the history of Russia (in USD per tonne). They could not stay that low for long, and therefore bounced in September 2018 from the price bottom to a relatively balanced level. The reasons for the jump are simple: negative news on the beet crop, devaluation sentiments of market players due to sanctions.
In addition, in the last two seasons, Russia produced much more sugar than consumed, and at the same time, the country did not deliver it. These reserves will be eaten up.
However, it should be understood that retail prices react late and non-linearly. For example, the chains bought the sugar that is sold in stores now in August, so the consumer will feel the price increase in November-December, and it will seem moderate.
Andrey Sizov
Executive Director of the Sovekon Analytical Center
"The situation with bread is not alarming, but meat and poultry will rise in price"
- So far, nothing is happening with sugar and bread this year, a fairly common situation. Retail prices for sugar in September fell by 2%, and in October there was an increase. It happened due to the growth of wholesale prices, and the cost of sugar in the world, moreover, it was influenced by the devaluation of the ruble.
The price of bread has increased because flour and wheat are becoming more expensive. At the same time, the rate of growth of prices for bread is very low: in annual terms, they are only 3%, and in September, 1.5%. And sugar and bread will continue to rise in price at a relatively high rate, and its maximum - up to 1-2%, and this is the most "terrible" scenario that we face in 2018. Therefore, when they say that prices will rise by 10-15%, then I very much doubt it.
You see, it doesn't happen that companies "A" and "B" will simply take and raise prices, because the cost of some goods has increased. Firstly, we have high competition in the food market, and, secondly, they will lose consumers. A kind of buffer in this chain is retail chains who bargain for themselves the most favorable prices, and it is the consumer who is the ultimate “beneficiary” of these “transactions”.
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Much more dangerous than the rise in the cost of bread and sugar, for example, is the rise in prices for meat and poultry - these products are more important in the diet. A serious leap can occur here due to the increase in VAT. But it is difficult to talk about specific figures now, we will see them in fact.
Against the background of all that is happening, the situation with consumer demand remains deplorable. After a slight recovery, it began to decline again, and this only indicates that the consumer has no money in his pocket.
Despite the fact that Russians are already accustomed to constant growth prices for food, goods, services and fuel, each rise in price still becomes extremely unpleasant surprise... Thus, a sharp rise in the cost of sugar is of great concern: everyone is well aware that a rise in the price of granulated sugar will lead to an increase in the price of confectionery, juices, baked goods, as well as any products that contain it.
It should be noted that wholesale prices for sugar have increased by one and a half times compared to the cost of the previous year in the same period. The increase in prices for granulated sugar began last month - September, and now it became clear that the wholesale cost of granulated sugar is actually fifty percent higher than in the fall of 2017. What is the reason for the rise in sugar prices in Russia? Let's try to figure it out.
On the one hand, the answer must lie somewhere on the surface, since there must still be a reason for the rise in price. On the other hand, since the beginning of the year, the wholesale cost of sugar has increased by forty-four percent, and in the materials of the Ministry of Agriculture, the reason for the “rise” of the price is not specified.
Note that in Russia the price of sugar is kept at the level of thirty-five rubles per kilogram - but this is in the central part of the country. In the Southern Federal District, sugar is even more expensive, and its cost almost reaches thirty-six rubles.
According to experts, the rise in sugar prices in September came as a surprise not only for Russians, but also for the market. By the way, already at the end of September in many regions, the cost of sugar began to decline slowly, but in Central Russia the price is still holding at the level of the aforementioned thirty-five rubles.
The main reason for the rise in sugar prices is the low yield of sugar beets. It is noted that this year this culture was allocated six percent less area for sowing, and the yield of beets in the south of the country has completely decreased by a quarter. Accordingly, less sugar will be produced in 2018 than the projected consumption level.
Will there be a sugar deficit in Russia?
Although sugar prices have skyrocketed and are likely to rise further, sugar shortages are not expected. Thus, although the harvest this year was small, and the level of consumption is predicted to be higher than the production of sugar from "fresh" beets, there are reserves of sweet sand in the country. Since last seasons, about two hundred thousand tons of sugar have been stored, and Russia imports about three hundred thousand tons from Belarus. With such "layouts" the country can even export about one hundred fifty to two hundred tons, which, of course, is not very logical, but possible. In general, a sugar deficit in Russia in 2018-2019 is not expected.
A sugar deficit and an increase in prices on the domestic market can also be created artificially due to the fact that Russian sugar producers decide to take advantage of the deficit in neighboring Kazakhstan, with which Russia has a common economic space, says one of the interlocutors of RBC.
Kazakhstan enjoyed a privilege within the framework of the EAEU and could import raw sugar from third countries duty-free (in Russia the duty is $ 140-250 per ton), but from 2019 this will not happen. In addition, from August 1, 2018, the privilege for some participants of the free economic zone on duty-free import of white sugar from outside the EAEU, and now such sugar when imported into Kazakhstan is subject to a duty of $ 340 per ton, as in Russia.
As a result, about critical situation the producers began to declare: in September the buyers had sugar left “for five to seven days”, and “in two weeks” the sugar would run out in retail chains, the Kazakh media quoted Suren Abibulaev, head of the supply chain of the food division of the Raimbek company, as saying. In the Ministry national economy Kazakhstan's sugar deficit and rising prices were denied, media reported.
It goes without saying that the rise in the price of sugar in Russia occurs not only "in bulk", but also "at retail": it is noted that prices in retail stores react to the rise in prices for wholesale ones with some delay, however, an increase in cost is still foreseen. While in popular grocery supermarkets - for example, Pyaterochka, Perekrestok, Karusel stores - sugar prices remain stable. But this is happening only because the growth in the cost of granulated sugar was somewhat mitigated by the retailer.
By the way, let us remind you that sugar is a socially significant product. This means that if within a month in at least one region the cost of sugar rises by more than thirty percent, then for ninety days the state can set a "limit" for the retail price. The list of socially important foods also includes bread, milk, apples, carrots, chicken eggs and even several types of meat and fish.
Note that there is no exact forecast of sugar price hike yet, but if we believe that a shortage of this product is not expected, then the question arises: why should granulated sugar become more expensive in principle? There are no obvious reasons for this, except for the 2018 harvest, but it does not limit Russians in the consumption of this product either, since there are serious "sugar reserves".
Not a sugar year
One of the main reasons for the rise in wholesale sugar prices is the low sugar beet harvest, Ivanov explains. In 2018, the sown area for sugar beet was 6% less than in the previous year: 1.13 million hectares were sown under this crop. At the same time, the yield of sugar beet in the south of the country decreased by 25% compared to last year, to 371.6 centners per hectare. As a result, Russia, according to IKAR forecasts, will produce 5.8 million tons of sugar in the 2018/19 season, which is lower than the previous season and lower than the projected consumption level of 6-6.1 million tons. Ivanov, however, does not expect a sugar deficit: Russia at least 200 thousand tons of surplus reserves from previous seasons are preserved, and about 300 thousand tons are imported from other countries, primarily from Belarus. Taking this into account, Russia will even be able to export about 150-200 thousand tons of sugar.
Belarus helped
In the 2017/18 season, the sugar beet harvest was good, and Russia produced 6.6 million tons of sugar with domestic consumption of 6-6.1 million tons. The sugar surplus on the market led to the fact that sugar prices began to fall. Belarus helped to solve the problem, which bought the "extra" beet sugar from Russia and load its factories with it, limiting the import of raw cane sugar.
A month ago, a panic began on the market, which was associated with a very low yield of sugar beets in the Krasnodar Territory - this region provides 25% of sugar production, says CFO Russian office of Sucden Gleb Tikhomirov. According to him, the poor beet harvest in the region is associated with a severe drought. When it became clear that the situation in Central Russia is better, the sugar content in beets is high, production forecasts began to increase, adds Tikhomirov, warning, however, that sugar exports this season may decline.
A sugar deficit and an increase in prices on the domestic market can also be created artificially due to the fact that Russian sugar producers decide to take advantage of the deficit in neighboring Kazakhstan, with which Russia has a common economic space, says one of the interlocutors of RBC. Kazakhstan enjoyed a privilege within the framework of the EAEU and could import raw sugar from third countries duty-free (in Russia the duty is $ 140-250 per ton), but from 2019 this will not happen. In addition, from August 1, 2018, the privilege for some members of the free economic zone on duty-free import of white sugar from outside the EAEU was canceled, and now such sugar when imported into Kazakhstan is subject to a duty of $ 340 per ton, as in Russia. As a result, manufacturers began to declare a critical situation: in September the buyers had sugar "for five to seven days", and "in two weeks" sugar will run out in retail chains, the Kazakh media said Suren Abibulaev, head of the supply chain of the food division of Raimbek. The Ministry of National Economy of Kazakhstan denied the sugar deficit and the rise in prices, media reported.
Caramel and lollipops
The rise in sugar prices has already worried confectionery manufacturers. Vyacheslav Lashmankin, executive director of the Association of Confectionery Enterprises, told RBC that consultations on the situation on the sugar markets are being held at the level of the specialized associations ASKOND and Soyuzrossakhar. The representative of Soyuzrossahar did not respond to RBC's request.
Any increase in the cost of raw materials leads to an increase in production costs and a decrease in profitability, says Irina Ildarkhanova, Chairman of the Board of Directors of the Confael Group. She recalls that this year for confectioners due to the weakening of the ruble, imported raw materials have already risen in price. The rise in sugar prices, according to Ildarkhanova, will most of all hit the inexpensive segment of confectionery products, which almost entirely consist of sugar - caramel and candy canes. The consumer will not feel the rise in price of confectionery products at once, it will be gradual, the expert believes.
What's going on in retail?
Sugar is becoming more expensive not only from wholesale suppliers, but also in stores: according to the Ministry of Agriculture, since the beginning of 2017, retail prices for sugar in October increased by 17.6%, to 42.7 rubles. 1 kg. However, compared to October last year, prices rose by only 5%. Rosstat data indicate that in September retail prices for granulated sugar were lower than a year ago: 41.1 rubles. against 42.6 rubles. for 1 kg. However, Rosstat does not yet have data for October. Retail prices traditionally react to the dynamics of wholesale prices with some delay, Ivanov points out.
In X5 Retail Group (Perekrestok, Pyaterochka and Karusel chains), according to its representative, the increase in purchase prices for sugar has been recorded since the beginning of September. But this growth has been mitigated by the retailer itself, and sugar retail prices remain stable, the group said. The Auchan network declined to comment. Representatives of the Magnit, Dixy, Lenta, Metro Cash & Carry chains did not respond to the request.
Granulated sugar is included in the list of socially important products for which the state can set maximum retail prices for 90 days, if within a month this product has risen in price in at least one region by more than 30%. In total, the list, enshrined in government decree No. 530 of July 15, 2010, includes 24 products, including bread, chicken eggs, drinking milk, carrots, apples, several types of meat and fish.
Coming deficit
World sugar prices are at a low level, but global markets are also on the rise, according to IKAR data. Prices are rising amid expectations for a deficit global sugar balance after two seasons of surplus. According to preliminary estimates, the sugar deficit in the 2019/20 season will amount to 7.2 million tons with a consumption of 189.6 million tons.