2006 Could See Record Russian Federation Sugar Beets

By Scott C. Lucas|9 October 2006

Sugar beet production is expected to hit record levels in 2006 as acreage was 18% higher than in 2005 and high world prices for raw sugar impacted domestic prices and dampened imports, according to the US Department of Agriculture’s Foreign Agriculture Service (USDA-FAS).

Harvesting began earlier than average in beet-growing regions due to high temperatures. As of late August, 326,400 hectares (Ha) had already been harvested. Russia’s Ministry of Agriculture expects to harvest 22.5 million metric tons (MMT) of sugar beets, which is 1.5 MMT more than last year. Yields in Stavropol and Krasnodar are 43 MT/Ha and 34 MT/Ha, respectively. In Kursk, the beet yield increased 8 MT/Ha to 31 MT/Ha in 2006.

Changes To Come?
At the same time, crop acreages may have more significant changes on the horizon in the Russian Federation. In hopes of ramping up production of biofuels primarily to serve EU markets, the Russian Federation’s Ministry of Agriculture has set interest-rate subsidies for 5-year commercial investment loans are now available for enterprises using advanced technology to process high-protein crops such as maize and soybeans.

Processing for production of biofuels is included in these technologies. It is not clear whether the order is a public relations measure responding to the industry’s requests for better technology, or a response to actual requests for subsidized credit. If enterprises do emerge, demand for oilseeds other than sunflowers will increase, especially for canola and soybeans. However, the demand for oilseed as a bio-fuel input is low as European companies prefer to purchase raw materials and rely on their own domestic subsidies for processing, reports USDA-FAS. Incentives for the production of sugar and milk substitutes, protein feeds, and ingredients for the food industry may benefit.