The Russian Federation – Specifics of the Sugar Market

Abstract

The Russian Federation represents a significant force in the global production and consumption of beet sugar. Its population which is in excess of more than 140 million people consumes over 5.6 million net tons of sugar annually, and the amount is steadily growing. The Russian sugar industry was unable to meet the domestic demand, especially during the economic transformation period (sugar beet and sugar production are very sensitive in relation to changes in economic, political, production and consumption environment (SIŒpicIŒka, JanotovaI , 2013), and Russia has thus become heavily dependent on imports of both refined and raw sugar. After a long period of stagnation the Russian Federation has over the past decade focused on promoting plans for restoring the production capacities of both the sugar beet growing and sugar manufacture. The government programme promoted at both the federal and regional levels has very significantly boosted the production potential and reduced Russia’s dependence on imports of sugar. This article aims to identify major trends and directions affecting the development of the Russian sugar industry in the past two decades. From the analysis outlined below it follows that the period of 1992 - 2000 was a very critical time for the Russian sugar industry during which there was a downswing in its cultivation and processing capacities. There was a significant decline not only in the quantitative but also qualitative characteristics of the Russian sugar industry. As a consequence, there has been a fall in competitiveness and a significant increase in import dependency. In the period 2000 - 2012, then was contrary to resuscitate the Russian market and the economy. This was reflected in the growth of sugar beet production, as well as in the growth of its own sugar production. Russia‘s dependence on imports of sugar from abroad dropped significantly and changed the structure of traded goods containing sugar. Due to a series of reforms, and to strengthen the competitiveness of Russian sugar industry, especially in relation to countries with which Russia has signed an agreement on customs union or free trade area.