AgMin ruling out confectionary products shortage in Russia

MOSCOW. March 15 (Interfax) - The Agriculture Ministry is ruling out the risk of shortage of confectionery products in Russia but is allowing for changes in the product mix in the face of rising costs.

"On the whole, the Russian market is fully supplied with confectionery products, a risk of shortages can be ruled out. At the same time, adjustments in the product mix are possible via changes in the nomenclature of supplies and substitution of some items," the ministry said in a statement.

The Agriculture Ministry points to the fact that Russian food and processing industry enterprises, including producers of confectionery products, are currently working under conditions of a significant increase in costs. This is due to exchange rate fluctuations, the rising cost of packaging, raw materials, logistics, electricity rates and other cost components. Trends in prices for tropical oils, cocoa products and sugar also have a significant impact on the confectionery market.

At the same time, the ministry points to the fact that "growth in food prices is a global trend due to the breakdown of traditional supply chains and the increased demand for agricultural products around the world."

As reported, in order to maintain a stable supply of sugar, including for industrial consumers, the Russian government has imposed a temporary ban on the export of sugar through August 31, 2022. Furthermore, a tariff concession has been introduced for the import of sugar and raw sugar in the amount of 300,000 tonnes, which is valid through August 31.

In order to increase the production of sugar beets, areas on which it is cultivated are due to increase to 1.1 million hectares this year. "This will allow production of enough sugar to fully meet domestic demand in the new season and supply the EAEU countries. In addition, this year the ministry will set up an intervention fund of white sugar in the amount of 250,000 tonnes. Purchases into it will begin in the period of sugar production, sales - in case of a sharp rise in prices on the domestic market. Thus, the fund will contribute to maintaining a stable price situation in the long term," the statement said.

According to the Association of Confectionery Industry Enterprises (ASCOND), Russia produced 3.983 million tonnes of confectionery products in 2021, a 3.6% increase compared to 2020. Moreover, the industry overcame pre-Covid 2019 figures (3.929 million tonnes). The share of sugar in the structure of feedstock for confectionary production is 38% (1.5 million tonnes per year).