According to the Federal Center for Agroanalytics, in 2019, Russian sugar beet producers harvested 54.4 million tons, an increase of 21% compared to 2018. The acreage under crops increased by 2%, and the yield of sugar beet increased by 22%. As a result, sugar production reached record volumes, and the price of the product dropped. However, fortunes were reversed during the 2020 season, as crop acreage reduced by 19%, as the year was marred by a drought that severely affected crop production forecasts, lowering them by 37%.
The situation has been more predictable during the 2021 season. The acreage under sugar beet is estimated to grow by 200K hectares to 1.1 million hectares, and production is expected to increase to 40–44 million tons. According to the Russian Ministry of Agriculture, due to favorable weather conditions, the larger sugar beet planting area will help the country harvest 40 million tonnes of sugar beets and produce approximately 6 million tonnes of white sugar from it in 2021.
(Sugar beet farm in Belgorod region, Russia)
During the past five years, beet sugar production in the Russian Federation exceeded consumption. During the 2019/20 agricultural year, approximately 7.3 million tons of beet sugar were produced in Russia, while domestic market demand amounted to 6 million tons. Despite the lower output in the 2020/21 season, the country’s low sugar consumption resulted in a sugar stockpile from 5 years of over-supply. According to Russia’s Sugar Producers’ Union, the sugar stockpile has reached approximately 3.1 million tonnes. It has led to Russia becoming the leading exporter of beet sugar globally, exporting a value of USD 67.53 million in 2020.
Raw beet sugar exports in 2020
Source: ITC Trade Map
By the end of 2020, beet sugar prices rose more than any other product in Russia. According to the Federal State Statistics Service, from February 2020 to February 2021, the beet sugar price rose by 63.97%. As a result, the Russian government has taken several measures to stabilize sugar prices, including signing an agreement to freeze prices for significant producers and retail chains. In 2021, sugar beet sown areas are expected to expand by 10-15% (1.06 Mha), which will help to keep sugar prices stable in Russia. An expected harvest of at least 40M MT, aided by stockpiles from previous seasons, will cover the sugar consumption of about 6M MT of sugar, which will be enough to meet the domestic market’s needs.