Kings of sugar in the pursuit of profit

Sugar imports in January-February (according to the State Customs Committee - $ 26 million 817.51 ​​thousand) were 2.54 times higher than in the same period last year.

According to experts, this is due not so much to the reduction of the area under sugar beet, as to the benefit from the import of cheap products almost ready (up to 95% from Brazil and the rest from Cuba) under the guise of raw materials, not subjected to duty or VAT. In addition, there has been reduction in labor costs, transportation costs in collecting beets, depreciation and amortization expenses and consumption of electricity during its processing.

Foreign consumers (mainly Turkmenistan and North Caucasus republics) know the substitution scheme of beet by cane, so they use administrative levers of deterrence. Because of this, the level of exports decreased 10% for the year - up to $ 30 million 868.68 thousand as of March 1.

SSC has not published the figures for 2013, but a year earlier (main customer - Azersun Holding) collected 173 848 tons of sugar beet. Peaked in 2010 and 2011, on the background of contracts with Russian regions, the yield reached 251 854 tons and 262 949 tons respectively. According to the expert on Agriculture Economic Research Center Vaheed Maharramov, the slowdown in the last two years was due to the fact that beet is unprofitable to grow because of low yields (30 tons per 1 ha, while the world average is 90 tons). But the main reason is the monopoly in the industry.

World practice shows that beet harvesting in large areas is useful for cultivation and profitable for the manufacturer (of the food it also makes alcohol, yeasts and other products), under the application of machinery and advanced technology. Furthermore, according to taste, nutritional quality, and others, beet is positively different from cane. In Azerbaijan, low crop yields and use of manual labor make the industry costly. As a result, the main customer on the one hand, does not waive the government subsidies on diesel fuel, motor oil and other technical attributes of modern agriculture, and on the other, the harvests are less than the actual demand, because the customer prefers cheap overseas goods.

For reference, on the London Stock Exchange May delivery a ton of beet sugar is $ 474.15 (10 days ago, it was 555), and Brazilian sugar cane is $ 365.25, which is 23% of the difference. Given the scope (Maharramov believes that the State Customs Committee and the State Statistics Committee deliberately understate import data in favor of domestic production) of the supply, it turns out that Azerbaijan imported in January-February about 7,000 tons of raw sugar that was a serious benefit for monopolists importing sugar suspension for subsequent processing.

Azerbaijan actively cultivates beets in the Nakhchivan autonomous republic and the Western economic region, thanks to earlier mass planting by Azersun Holding observed in Imishli and the surrounding areas of the Kur-Araz lowland. But fans of the import of cane sugar today have opened another source of imports - Thailand, which is considered the second level in the purchasing and export of this crop. So beet has little prospects, and it pushes the country to import dependence in this segment. To recover the lost positions will require considerable costs in the future, the expert believes.

World sugar consumption rate per person is 32 kg per year. According to the Cabinet of Ministers of Azerbaijan, minimum consumption of sugar and confectionery products for the working-age population is 16.3 kg, for pensioners - 14.6 kg and for children up to 15 years old - 19.5 kg.

According to the State Statistics Committee, in 2012, the natural sugar consumption was 410 201 tons.

According to the Customs Committee, in January-February 2014 Azerbaijan traded with 2 480 foreign business entities from 112 countries in the amount of $ 4 billion 968 million 389.85 thousand. The Customs Committee presented 30 169 declarations for shipments of imported products in the amount of $ 1.19 billion. -17D-