World prices for white sugar reached a maximum in 21 years. Reasons different: from low world stocks to drought in Russia, floods in Pakistan and a modest harvest in India. Involved in the sugar speculation and international investment funds. Wholesale sugar prices in Russia may grow in the near future by 20%, while retail prices could jump even higher — even despite the end of the autumn season home preparations.
The prices for white sugar rose during the London trading on Tuesday to its highest level, at least since 1989, on concern that India may limit its exports after the harvest of sugar cane was lower than forecast, the agency Bloomberg. India is the second largest producer and the largest consumer of sugar in the world.
White, or refined sugar for March delivery on the London Stock Exchange rose to U.S. $ 789.5 per ton. This is the highest level since the agency began collecting data in 1989.
Price of raw sugar for March delivery on the New York Stock Exchange increased by 1.6% — to 32.39 cents per British pound. It rises 10 trading sessions in a row, which has not happened since January 2006. And earlier on Tuesday trading quotations reached its highest level since January 1981 — 32.48 cents per pound.
"The world is uncertainty about the actual amount of sugar, and coming from India, the information is still very different, — said a trader OTCex Group Jonathan Bush. — What happened to the harvest this year, badly around the world. "
Experts note that due to the poor harvest Russia may have to import raw sugar at higher prices. "This year the sugar production in Russia because of the drought will not exceed 2.8 million tons compared to the expected 4 million tons. When consumed in 5,4-5,5 million tons of demand for imported sugar at 2.7 million tons in 2010-2011. Thus, Russia will have to dramatically increase sugar imports, "- said the expert evaluation department" 2K Audit — Business Consulting »/ Morison International Irina Vorobyov. The main suppliers of sugar cane in Brazil and Russia, Cuba. Beet sugar in Russia supplying the countries of Eastern Europe, Belarus, Ukraine. "In Moldova, Ukraine and Belarus yield of sugar beets this year were up, so we can compensate for our needs at the expense of sugar imports from these countries. So the price of sugar in Russia should not rise as fast as grain, flour or buckwheat, but by 10 percent over the next two months, they may well grow, "- said Vorobyov. According to her, the poor harvest of sugar cane in the main producing countries can not help but reflect on Russia. Because of the climate problem in India and Brazil, world sugar prices are rising, and this is certainly reflected on the domestic Russian prices. "Generally, the market of raw sugar is very volatile, in 2010, quotes range from 13 cents to 30 cents per pound. Therefore, to predict the price for it is very difficult "- warns economist.
Expert at the Institute for Agricultural Market Studies (IKAR) Yevgeny Ivanov explains the rise in sugar prices to several factors: low world stocks of sugar after two years of deficits, the expected increase in purchases of sugar from the major importers (China, Russia, Pakistan, Indonesia, Malaysia), the weakening of the U.S. dollar as well as the game of investment funds in commodity markets. According to him, the world price rose from 13.7 cents in early May, to 33.3 cents per pound at the beginning of this week. "If you do not change the world price and the system of state regulation of imports, the Russian forward in the next 3-4 month increase in wholesale prices by about 20% to the cost of raw sugar," — said Ivanov stressed that in deliveries of finished white sugar from Ukraine, Belarus and other CIS countries, Russia does not need at all. "All that Russia is not in a position to make beetroot, it can make from imported raw sugar by uploading their own factories and providing revenue. The continued rise in world prices, it is best to temporarily reduce the import duty on raw sugar. It is temporary, so the rise in prices will not last forever and can be replaced by a new decline, "- said the expert ICAR.
ICAR experts remind us that beet sugar supply in Russia Belarus, Moldova, Kazakhstan, Kyrgyzstan. In this case, the export potential of these countries is quite modest — at least not comparable to the annual Russian consumption of 5.6 million tons. Thus, the export potential from suppliers Moldova is about 30 tons, while exports from Belarus must not exceed the agreement with Russia 150,000 tons.
Do not be surprised economists and jump in retail prices. "I fully admit possibility of a sharp rise in price of sugar in Russia. Oh very well have been "worked out" the story of buckwheat — why not again? — Says CEO "FinEkspertiza" Aghvan Mikaelian. — Rising prices for buckwheat was disproportionate to the shortage of this product. Prices are unlikely to fall now — we just get used to, that's all. Is a repeat of the story with sugar? Yeah, maybe, but a lot depends on how this situation will behave the government. "