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. Last Updated: 07/27/2016

Tariff May Provoke Sugar Glut

The country faces a glut of sugar as importers have increased shipments ahead of a proposed new seasonal tariff, while stocks of beet sugar are much higher than in previous years, analysts said Thursday.

"Even if current levels of imports are maintained, the Russian market faces over-saturation," the Institute for Agricultural Market Studies, or IKAR, said in its monthly report.

Russia plans to set a new seasonal raw sugar import tariff of $250 per ton in April, below a previously planned $270, industry lobby the Russian Sugar Producers' Union said earlier.

The seasonal tariff will replace the current floating tariff, which has been set at $140 per ton for more than a year.

"The Economic Development and Trade Ministry has requested we present additional calculations to prove the necessity of the tariff and proposed to cut it to $250 per ton, to which we agreed," said Sergei Mironov, deputy head of the sugar union's management committee.

He said the union expected the tariff to be set up in April, but traders have said it could be effective from March, while IKAR said it expected the tariff no earlier than May.

"We are still collecting signatures on a draft resolution ... and no one has yet scrapped the demand of the Tax Code to keep a 30-day quarantine after the resolution is issued. So we still expect [the tariff] some time in April," Mironov said.

The lobby has been trying to persuade the government to replace the current floating tariff with a seasonal rate of $270 on raw cane sugar for five months from March. It argues this would protect domestic sugar-beet growers.