"Sugar prices continue to fall, while demand is rising: the export of Russian sugar is rapidly increasing."

The cost of wholesale sugar continues to decrease, but the demand is starting to pick up. If the situation continues in the same way in the future, we expect two support levels:

• the first one - 56 rubles per kilogram (at this price, it will be more profitable for Kazakhstan to buy Russian sugar rather than import it);
• the second one - 52 rubles per kilogram (at this price, neighboring countries will start actively buying Russian sugar as a cheaper alternative to imported raw materials).

It is expected that the increase in sugar beet production and the lifting of export restrictions from September 1 will lead to an increase in Russian sugar exports. According to our information, some companies are preparing to start producing beet sugar, which will allow for the export of additional volumes of Russian sugar to Uzbekistan.

According to the climate model, the moisture situation in sugar beet fields is starting to improve. In July, significantly less precipitation fell than the average for the period from 2018 to 2023 - only 55%. The beginning of August, on the contrary, demonstrates an excess of precipitation compared to previous seasons by 60%.

Meanwhile, sugar consumption over the past year has stabilized at 5.98 million tons. According to our estimates, as of the end of June, sugar stocks (factory + wholesale + retail) amounted to 900 thousand tons. This exceeds the level at which the sugar price starts to rise - around 500 thousand tons.

The calculated cost of white sugar from raw materials is 843.52 dollars per ton.

As of August 8, 2024, the cost of sugar from imported raw materials is:

• in Uzbekistan, it is 705.2 dollars per ton (52.45 rubles per kilogram in Krasnodar including delivery) excluding taxes;
• in Kazakhstan - 638.4 dollars per ton (51.18 rubles per kilogram in Krasnodar including delivery) excluding taxes.

For the first 8 days of August, 2.4 thousand tons of Belarusian sugar were imported into Russia by rail. The pace of Russian sugar exports by rail is increasing, during this period, 9.7 thousand tons of sugar were sent to Kazakhstan and Kyrgyzstan.

The transit of raw materials since the beginning of August amounted to 14.6 thousand tons, mainly from Novorossiysk to Uzbekistan.