20 Aug 2010 16:36

Russian sugar beet crop unscathed by drought

MOSCOW. Aug 20 (Interfax) - Russia's sugar beet crop will emerge relatively unscathed from the summer's drought and not more than 5% of it will have to be ploughed under, an expert from the Institute for Agricultural Market Studies (IAMS) said.

"The drought caught many sugar beet regions, but it won't have as much impact as on the grain fields," Yevgeny Ivanov told Interfax.

Farmers in the Central Black Earth and Volga-Urals regions might have to plough beets back in, and only then if it is not economical to harvest them because it will cost more to harvest and ship them to refineries, Ivanov said.

This year's sugar beet area was 1.16 million hectares, compared with 823,000 hectares in 2009.

But the beet crop could have been saved even where the abnormal heat lingered long, he said. "Monitoring shows the roots are alive and that they still have green leaves, and the beet will grow following rain in some regions. Of course we won't be able to restore everything that actually has been lost to the drought. Yield will fall, but given that the heat has helped bolster the sugar content of beet 10%-20% and that the seeding density was 4% above last year, the situation isn't as grave as it might seem," Ivanov said.

Also, many refineries in the Black Earth and Volga regions have delayed business for a month to allow the harvest to build up, he said.

The IAMS this week lowered its sugar beet harvest forecast to 3 million from 3.3 million tonnes. The biggest drop, to 1.49 million tonnes from 2.1 million tonnes, is being forecast in the Central Black Earth. The harvest could fall 42% to 214,000 tonnes in the Volga region, but rise to 1.25 million tonnes from 707,000 tonnes in the south.

Regarding the world situation, Ivanov said that despite bigger sugar output in India and Brazil, "the market has been preoccupied by mainly negative factors since May, with the drought in Rusia and the floods in Pakistan and a drop in output in Thailand and Australia." Sugar prices have soared almost 50% to $19.5 a pound in the last few months.

Wholesale prices in Russia have risen 10% to 28.5 rubles a kilo (Krasnodar prices) in the last ten days. This is because refineries in the south only have so far started to process sugar beet and "not enough to meet requirements." "But the process should reverse once the harvest really gets under way and all refineries are in operation, and prices will fall as they usually do in the autumn," Ivanov said.

The Russian Sugar Union (SoyuzRosSakhar) says Russia was producing 9,000 tonnes of beet sugar a day by August 20 - 1,300 tonnes more than at the start of the week. It said 17 refineries were operating in the Krasnodar and Stavropol territories and one in the Lipetsk region. A total of 1.043 million tonnes of beet has been procured, 860,000 tonnes of it has been processed and 98,000 tonnes of sugar produced.

Russia needs an estimated 6 million tonnes of sugar per year, which it obtains from its own beet and from imported cane. The food security doctrine states that up to 80% of the country's sugar should be produced from beet, and this target is closer to being achieved: 65.5% of the sugar was produced from Russian beet in 2009, almost double the average for the last five years.