SLUTSK, 16 February (BelTA) – Russian sugar producers operate in more favorable conditions than the Belarusian ones, Chairman of Belgospishcheprom Concern Alexander Zabello reported to Belarus President Alexander Lukashenko on 16 February, BelTA informs.
During his visit to Slutsk Sugar Plant the head of state inquired why the prime cost of the Belarusian sugar is higher than that of the Russian one. The chairman of Belgospishcheprom Concern provided several explanations.
“The raw material, i.e. sugar beet, accounts for 65.9% of the prime cost of the product. Last year, sugar beet in Russia cost $27-37 per tonne, depending on the region. The price in Belarus, including the delivery costs was $43. The farms themselves deliver sugar beet to plants in Russia,” Alexander Zabello said.
Russian companies have one more advantage. The gas prices for them are much lower than for the Belarusian companies. “We pay $275 per 1,000 cubic meters, while they pay $80,” the head of Belgospishcheprom Concern said.
In addition, one of Russia's largest manufacturers is exempt from VAT and therefore can reduce the price by an additional 10%.
In the face of the increased competition in the neighboring country the Russian sugar producers flooded the Belarusian market with the product. “Given the overproduction they do not know what to do with it and sell a tonne for pennies. Otherwise, they will have to pay for its disposal,” Alexander Zabello said.
In the face of the stiff competition in Russia, the Belarusian producers have been working to diversify markets. In 2017 they supplied sugar to 16 countries. The share of the Russian market declined by 23% to 53.7% of the total sales.
Last year, the Belarusian sugar mills exported the products to the tune of $208 million (up by 5.7% versus 2016). Sugar export outside the EAEU accounted for 34.1% of the total exports.
