Positions of transnational companies are affecting share of Russia's confectionery exports - analysts

MOSCOW. April 12 (Interfax) - Transnational confectionery companies still operating in Russia have reduced their export programs, which has affected the structure of Russian confectionery exports.

Deputy Head of the Agriculture Ministry's Agroexport Center, Evgeny Zaitsev said that chocolate is the key segment of Russia's confectionery exports during the Sugar Market of the CIS Countries 2024 international conference on Friday. Exports to the world market increased 40% to $780 million from 2017 to 2023, he said.

"However, its share in the total volume of Russian confectionery exports decreased during this period from 53% to 48%, which is partly due, and this is an important point; an important trend, to the reduction in export programs from transnational companies operating in Russia. These companies are present on the Russian market, but have cut back their export programs," he said.

This is specifically why supplies of Russian chocolate products to Saudi Arabia and the UAE have decreased over the past two years. Their presence in these markets was better through 2022. Meanwhile, these countries imported about 380,000 tonnes of confectionery products worth $1.75 billion in 2023, Zaitsev said. "These are, of course, premium markets in terms of price," he said.

The share of sugary confectionery products in Russian exports changed slightly from 2017-2023, while flour products' share increased from 32% to 38%.

Agroexport's presentation showed that Russian exports of confectionery products increased 50% from 2017 to 2023 to 648,000 tonnes with a value of $1.638 billion. At the same time, Zaitsev said that exports were on the rise through 2021. Then there was a "drawdown" in all segments. "One positive fact is that exports came back in 2023, but the 2021 record has not yet been repeated," he said.

Zaitsev said that exports of confectionery products from Russia are largely focused on the CIS countries. The top three importers are Kazakhstan, Belarus, and Uzbekistan, which account for about 55% of exports. In fourth place is China, which purchased $113 million worth of sweets last year and had nearly a 10% share of Russian confectionery exports.

The potential for further growth in the export of sweets "lies with markets for chocolate and sugar products," he said. However, we need to be prepared for some serious competition. As examples, Zaitsev cited Turkey, the EU and Egypt as the leading suppliers of confectionery products to the markets of the Persian Gulf countries.

As for sugar exports, Zaitsev said they have been focused primarily on the countries of the EAEU and the CIS in recent years. "The periodic inclusion of protectionist measures certainly reduces the potential for sugar exports to non-CIS countries," he said.

As reported, a customs subcommittee approved the introduction of a ban on the export of sugar from Russia through August 31, 2024.

Agroexport's presentation said that Russian sugar exports totaled over 700,000 tonnes in 2023 and more than 200,000 tonnes in 2022. Zaitsev said that 2020 was a record year, with sugar exports of 1.2 million tonnes.