Russia Reconsiders Sugar Import Quota; Effects Felt in Thailand.

Byline: John Helmer

Aug. 1--Russia, the world's largest sugar importer, is reconsidering the year-old sugar import quota scheme that has dramatically reduced Thai sugar sales to Russia this year.

The Russian sugar quota, introduced a year ago after intense lobbying by local importers, introduced a quota limit of 3.65 million tons for raw sugar imports a year. The government then auctioned quota allocations. For sugar imported within the quota, there is a 5 percent import duty.

All other raw sugar imports, as well as white sugar, pay a base import tariff of 30 percent . During the domestic sugar-beet harvest season, between June 15 and Dec 15, an additional tariff of 15 percent is levied to protect the price of the domestic product.

During the Soviet period, beet producers in southern Russia, Ukraine and Belarus produced about 8.5 million tons of sugar, while imports ran at around five million tons. Next to grain, sugar was the biggest food import at the time.

In 1999, Russian sugar output reached 6.8 million tons, up 41 percent from the year earlier. That was also a good year for Thai sugar sales to Russia; they jumped from $18.4 million in 1998 to $67.7 million. Other sugar exporters, like South Africa, also benefited with larger shipments to Russia in 1999.

However, the import surge led to intense rivalry among Russian importers, who lobbied the government to introduce protective measures.