Russia’s Black Sea ports are importing raw sugar from Thailand, the world’s second largest exporter of the sweetener, for the first time in eight years in order to save money, the Moscow-based Institute for Agricultural Market Studies said today.
As much as 200,000 metric tons of raw sugar are being shipped to the Black Sea region from Thailand, a “very rare” move, according to Swiss Sugar Brokers. About 90,000 tons of Thai sugar will be delivered to Russia in April, including 66,000 tons to the Black Sea ports, said Yevgeny Ivanov, an analyst at the institute also known as IKAR.
The Black Sea region usually imports sugar from top producer Brazil. Russia accounts for about 80 percent of deliveries to the region, IKAR said.
“The Thai premium is usually much more expensive than the premium for sugar from Brazil, as the Far East is always in deficit,” Naim Beydoun, a broker at the Rolle, Switzerland- based company, said in an e-mail today. “This year the Thai crop is huge and premiums collapsed, becoming cheaper than Brazil.”
Ivanov said the Russian buyers need a good discount to justify buying from Thailand.
Sugar for April loading in Brazil is 2.40 cents a pound more expensive than the May futures in New York, while Thai sugar for loading until May 15 is 1.50 cents a pound more expensive than May futures, data from the brokerage shows.
Thailand’s Production Rises
This season’s production in Thailand rose almost 12 percent from a year earlier to 7.57 million tons through March 20, researcher F.O. Licht said in a report. Output for the season may still reach an all-time high, it said.
Russia will import less than 1 million tons of raw sugar in the second quarter, according to the brokerage. The country imported 1.14 million tons between April and June last year, and 932,000 tons in the same period in 2009, according to IKAR.
Ports in Russia’s Far East last year imported 16,000 tons of Thai sugar, according to IKAR. Total raw sugar deliveries to Russia in April and early May will be about 766,000 tons, IKAR said.
Russia cut the raw-sugar import duty on Feb. 24 to as little as $50 a ton from $140 a ton to the end of July, when the rate will increase to at least $140 a ton when the domestic sugar beet crop comes on to the market.