Brazil, the world’s largest sugar producer, is exporting more sweetener to Russia and the Black Sea region as buyers take advantage of lower prices and try to ship before an expected increase in import duty next month.
Shipments from Latin America’s biggest economy to ports in Russia and in the Black Sea totaled 103,820 metric tons this month, according to Santos, Brazil-based SA Commodities and Unimar Agenciamentos Maritimos Ltda. That compares with no vessels in the same period a year earlier, Nicolle de Castro, an analyst at SA Commodities, said by e-mail today.
The import duty on raw sugar may rise by 22 percent next month in Russia, Kazakhstan and Belarus, Russia’s Sugar Producers’ Union said on its website on Nov. 29, citing calculations based on prices for the sweetener. Raw sugar futures traded in New York, down 16 percent this year, are heading for a third annual decline, the longest slump in more than two decades.
“Russian demand will be up this year, but recent increases are clearly in response to the fall in price opening up the import arbitrage early,” Toby Cohen, a director at London-based Czarnikow Group Ltd., which traded 2.4 million tons of raw sugar last year, said by e-mail yesterday. Arbitrage is the price difference between two locations.
Russia, once the world’s largest raw sugar importer, will bring in 83 percent more sugar this season at 1.1 million tons, estimates the U.S. Department of Agriculture. The nation will produce 4.4. million tons of sugar in 2013-14, down from 5 million tons a year earlier, data on the USDA website showed.
The import duty into Russia, Kazakhstan and Belarus is expected to rise to $171 a ton in January from $140 a ton this month, according to Russia’s producer group. Two vessels are currently scheduled to leave Brazil to the region, with one set to carry 30,750 tons of sugar to Russia and another 29,270 tons to the Black Sea, SA Commodties’s de Castro said.