Russia to change raw-sugar import duties upon WTO accession
MOSCOW. Nov 28 (Interfax) - When it becomes a member of the World Trade Organization, Russia will amend its scale for determining import duties on raw sugar, a document obtained by Interfax that concerns the country's membership obligations indicates.
The size of Russia's raw-sugar import duty is determined based on average monthly prices on the New York commodities exchange. The mechanism was introduced in 2004. It is intended to product domestic producers and the home market from sharp price fluctuation outside Russia - with the world price for raw sugar drops, Russia's import duty rises, and vice versa.
In 2010, in light of the substantial increase on the world market, a new, higher pricing scale for determining duties was approved. This is the one in effect now.
A representative of a major sugar company told Interfax that, in fact, the level of domestic-market protection when Russia joins the WTO will return the sector to the 2004 protection level and correspond to exchange prices at that time. This will make the domestic market less protected and more dependent on exchange prices.
Chairman at the Russian Sugar Producers Union Andrei Bodin said the sugar sector will adapt to the new conditions the country will face in the WTO. Russia's dependence on imported raw sugar has been declining in recent years, he said.
Initial figures indicate that Russia harvested a record sugar beet crop of 48 million tonnes this year. Beet sugar output is predicted at more than 5 million tonnes. Considering that the country's sugar needs are about 5.6 million tonnes, and that there are considerable carry-over stocks (2 million tonnes), raw sugar imports might not even be needed.
