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    Raw materials for sugar refineries // By-products of production become cheaper due to EU sanctions

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    The imposition by the European Union of a sanction on the import of Russian sugar beet pulp, used in animal feed, led to a drop in prices for it from more than 13 thousand rubles. up to 7-12 thousand rubles. per ton. Almost 90% of pulp was exported, primarily to the EU. Now companies are forced to look for new markets and offer to stimulate domestic demand for pulp from milk producers through subsidies. Otherwise, the profitability of sugar producers, whose main product is also becoming cheaper against the background of production growth, will be under threat.

    A Kommersant source in large agricultural holding. According to him, since August 1, when the beet harvesting and processing season began, prices for pulp have fallen by more than 50%. Information about the fall in prices for pulp was also confirmed by a Kommersant source in a large sugar producer.

    On the Sugar.ru portal there is an offer to buy pulp from the Agrocomplex im. N. I. Tkachev of the Korenovsky sugar factory in the Krasnodar Territory, 7 thousand rubles each. per ton.

    An interlocutor of Kommersant in one crop company explains the decline in prices for pulp by restrictions on the export of the product, introduced by the EU as part of the sixth package of sanctions against the Russian Federation in June this year. According to the Institute for Agricultural Market Studies (IKAR), in the 2021-2022 season, 1.5 million tons of beet pulp was produced in Russia, of which 88% was exported, and the EU countries accounted for 95% of exports. Kommersant‘s interlocutor in the market adds that beet pulp is usually cheaper than feed grains, including wheat, barley and rye. Soyuzrossakhar, as well as large sugar producers – the Rusagro group, the Prodimex holding and the Pokrovsky concern – did not provide a comment. that pulp is a good feed for dairy cattle. But in Russian animal husbandry, this is not a basic component of diets, adds Artem Belov, general director of the National Union of Milk Producers (Soyuzmoloko). According to him, Russian milk producers mainly use raw beet pulp if the sugar factory is within walking distance. Andrey Grigorashchenko, Vice-President of the Damate Group of Companies, predicts that due to a decrease in prices due to an increase in supply, the demand for pulp may increase. large agricultural holding. In addition, sugar prices in Russia are also declining against the background of output growth. According to Sugar.ru, wholesale sugar prices in Moscow and Krasnodar fell by 4.5 rubles from 18 to 25 August. for 1 kg, up to 55–55.5 rubles. for 1 kg.

    As a result, sugar prices in Krasnodar may fall to 45 rubles. per 1 kg, they expect it at Soyuzrossahar.

    According to the interlocutor of Kommersant in the market, pulp exports can gradually reorient from the EU to the countries of North Africa, the Middle East and China. Kommersant‘s source also allows for a revision of the EU sanctions, as it will be difficult for local livestock breeders to find a replacement for more than 1 million tons of feed component. In addition, sugar producers are trying to improve the technology for mixing beet pulp with molasses, another by-product that is not subject to sanctions, although it is subject to import duties in the EU, adds a Kommersant interlocutor in one of the producers.

    Soyuzrossakhar is also looking for ways to increase demand for beet pulp within the country. According to Kommersant‘s sources, at a meeting at the Ministry of Agriculture in mid-August, the head of the association, Andrei Bodin, proposed making the purchase of pulp one of the conditions for farms to receive subsidies per liter of milk. Andrei Grigorashchenko believes that this will raise demand by 20-30%, but suggests stimulating demand through subsidies for feed for milk producers.

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