Russia is expected to boost production of sugar to more than 7m tonnes in 2019, a new record, Deputy Agriculture Minister Oksana Lut said on Tuesday.
The country has doubled sugar output over the past 10 years to reduce its reliance on imports and began exporting a couple of seasons ago, mostly to nearby former Soviet republics.
The jump has led to a fall in domestic prices in the last two years, pressuring the profitability of producers. The agriculture ministry has asked independent farmers to avoid sowing more area with sugar beet until Russia develops exports.
"The sugar question is painful for the market - the price has fallen significantly," Lut told a conference in Moscow.
The white-sugar price index of IKAR, a leading agriculture consultancy in Moscow, had fallen to $309 a tonne in southern Russia by the end of last week from $531 in early 2019.
"But it is good for exports," Lut said. "If we don’t make it (expand exports) this year ... I think we can catch up in 2020-2021."
Russian plants have already produced more than 3m tonnes of sugar from this year’s beet harvest, up 300,000 tonnes from the same date a year ago, the national sugar producers’ union said on October 17.
Ikar sees Russia’s 2019 sugar production at 6.5m tonnes, up from 6.1m tonnes in 2018. This year’s domestic consumption, according to the consultancy, is expected to be 6.0m tonnes with 4.5m tonnes of stockpiles.
"This year, all performance indicators are almost at their highest level in history," Evgeny Ivanov, a sugar analyst at Ikar, told Reuters on Tuesday.
The country needs to export more than 1.5m tonnes of sugar this year to ease pressure on the domestic market, but is unlikely to sell more than 800,000 tonnes abroad, he added.
Russia has exported 240,000 tonnes of sugar since the start of 2019 to Kazakhstan, Azerbaijan, Belarus and Tajikistan, according to the producers’ union.