Azerbaijan's largest sugar producer keen to curb price increase
Azerbaijan, Baku, Nov. 26 / Trend N.Ismayilova /
The Azersun Holding, which owns the only sugar production plant in Azerbaijan, is working to increase local sugar beet production, the company reported.
"The holding supports planting sugar beets in the country's 29 regions to create domestic raw material reserves," the company said. "6,000 sugar beets have been planted in the regions."
Sugar prices on the world market have increased for more than six months. The holding kept prices stable on the local market at the expense of advance reserves. However, as these reserves are exhaustible, the structure has been forced to purchase raw materials already at the new prices.
"Today, Azerbaijan is seeing an increase in sugar prices, which is linked with global processes," the company said. "We had to buy raw material on the world market as there are few local suppliers. Thus, prices on the local market have now reached world prices."
The changing sugar prices in Azerbaijan in late 2010 and next year will be due to increased sugar prices on global markets. This is linked with unfavorable weather conditions in countries producing sugar cane. Meanwhile, the global market is waiting for a raw sugar bumper harvest in India and Brazil, which can be called the world's major sugar producers.
The situation on the world sugar market is constantly changing, the company said. Last year, the stock prices on raw sugar reached a historical maximum. Meanwhile, in November, prices fell. The daytime drop in sugar prices on Nov. 12 was the largest such drop in the past 22 years.
Prices on raw sugar on the New York Mercantile Exchange on Nov. 22 continued to fall. The cost of March raw sugar contracts reached $0.2615 for 1 pound. March white sugar contracts on the London Stock Exchange on Monday reached $679.10 per 1 ton, or $29.60 less than yesterday.
The largest sugar producer in Azerbaijan - the Imishli Sugar Plant - has tried to keep prices stable this year despite world processes. The situation with sugar prices in 2010 was more or less stable compared to 2009 until the recent increase.
The majority of raw material for sugar production in Azerbaijan is imported into the country from abroad, but some sugar is made by processing the sugar beets grown in the country. The Imishli plant signed a contract with 3,000 landowners engaged in sugar beet production in 2009.
Since 2006, the Azersun Holding has been actively involved in sugar beet development in the country, rendering assistance to farmers.
Currently, the sugar produced at the factory ensures domestic needs. The company also exports the sugar to Central Asia. The competitiveness of its products is important for the plant.
At present, Imishli's products twice exceed the domestic demand. The annual production of sugar is 400,000-450,000 tons given domestic demands of 230,000-250,000 tons.
The plant's products are exported to Turkmenistan, Afghanistan, Georgia, Ukraine and Iraq.
The Azersun Holding was established in 1992. The company specializes in tea processing and packaging, vegetable oil, sale and distribution, construction, banking, insurance, manufacturing paper products, meat and vegetables, and goods transport and storage.