Sugar price will rise if local producers do not step up

Russia bans sugar exports until the end of August 2024. We all remember the consequences of the previous such decision in 2022. Back then, sugar disappeared sharply from the shelves, and prices, according to official statistics, more than doubled. It should be noted at once that this time Russia has introduced exceptions to sugar exports for countries from the EAEU. Kazakhstan has been allocated an export quota of 120,000 tonnes of sugar. The analyst of the World of NAN editorial board analysed whether this volume will be enough and what consequences should be expected.

In general, the production of own sugar has become one of the most important tasks in the issue of food security after the sugar shortage in 2022. However, as of 2023, the target has been half achieved. Sugar production fell by 22 per cent in 2023 compared to 2022. But on the other hand the gross sugar beet harvest managed to increase by 67% in 2023, apparently not yet reflected in production. In the first three months of 2024, sugar production fell by 75%, probably due to maintenance work.

On the other hand, sugar imports excluding cane sugar increased from 272,000 tonnes to 303,000 tonnes. Almost all hard sugar comes to us from Russia (288 thousand tonnes). A fairly large volume of cane sugar is also imported from Brazil. In 2023, the volume of this sugar fell from 262 to 133 thousand tonnes due to the fact that Russia regained its position after the export ban in 2022.

It turns out that in the baseline scenario, the ban on sugar exports to Kazakhstan will have an insignificant impact. On average, the need for Russian imports is 25 thousand tonnes per month. The ban will be in effect for 4 months and therefore the export quota of 120 thousand tonnes should be enough. However, let's hope that local sugar production will recover after a very weak first quarter. If this does not happen, then 120 thousand tonnes of sugar may not be enough for 4 months, which will result in higher prices on our market.

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