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Demand drops due to logistical difficulties and low-quality sugar
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Demand drops due to logistical difficulties and low-quality sugar

Active growth of wholesale sugar prices has been replaced by a decline, as over the past two days sugar has become cheaper by 1.00 rubles per kilogram. We are observing a decrease in demand and addressing logistical issues.

17 July 2023 17 July 2023

The active growth of wholesale prices for sugar was replaced by a fall, over the past two days sugar has fallen in price by 1.00 rubles per kg. Market participants explain the decline in demand, among other things, by logistical problems. Firstly, by the end of the season, a significant part of the supply is the remains of low-quality sugar. Secondly, we see a summer increase in the price of road transfers and a shortage of vehicles, as sugar has to compete with the seasonal transport of vegetables and fruits. All this leads to uncertainty in supplies, sellers cannot guarantee the timing of shipment and the quality of sugar. In such a situation, buyers prefer not to take risks and wait for a new crop of high-quality sugar to enter the market.

According to Sugar.ru price monitoring data, for the period from July 6, 2023 to July 13, 2023, the dollar exchange rate rose by 0.3% (on July 6 - 90.34 rubles / $, on July 13 - 90.63 rubles / $). The ruble Moscow wholesale price for sugar increased by 1.40 rubles/kg (+2.07%), the Krasnodar wholesale price increased by 0.50 rubles/kg (+0.78%). The Moscow dollar wholesale price for sugar increased by $0.013/kg (+1.74%), the Krasnodar wholesale price increased by $0.004/kg (+0.56%).

However, the previous rise in prices made rare forward offers of new crop sugar at 63 RUR/kg a thing of the past. Sellers, seeing a possible rise in prices, are in no hurry to offer sugar of a new crop today (deliveries from mid-August) at a discount to the current price.

The estimated cost of white sugar from raw sugar is $817.67/ton (74.10 rubles/kg).

As of July 13, 2023, the cost of sugar from imported raw sugar in Uzbekistan is $831.5/t (66.75 rubles/kg in Krasnodar including delivery) excluding VAT and duties, in Kazakhstan - $764.2/t (65 36 rubles/kg in Krasnodar including delivery) without VAT and duties.

According to the railway monitoring Sugar.Ru, 2.6 thousand tons of Belarusian sugar were imported to the Russian Federation in 12 days of July. This is lower than the rates of previous months (for the whole of June - 16.0 thousand tons, for May - 11.4 thousand tons). Export rates also slowed down, since the beginning of July 6.5 thousand tons of white sugar have been exported (30.9 thousand tons for the whole of June, 33.5 thousand tons for May). The export of white sugar goes mainly to Kazakhstan, and supplies to other countries of Central Asia also continue. Railway transit through the Russian railway since the beginning of the month amounted to 2.3 thousand tons of Belarusian sugar.

The transit of raw sugar from the beginning of July amounted to 20.0 thousand tons from Riga, shipments go to the addresses of sugar factories in Kazakhstan and Uzbekistan.

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