Russian Federation Sugar sector review
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The Russian Federation’s sugar industry has expanded output dramatically over the past ten years. As a result, the country has steadily reduced its reliance on imports. The stimulus for this expansion can be traced back to privatization of farms and factories in the early 1990s. However, sector development started only after the government has implemented the current system of variable import duties to protect local producers from volatile world market prices starting 2004. High domestic sugar prices accelerated investment and the expansion of the sector in the Russian Federation, as local beet prices increased by more than those of alternative arable crops. With these foundations in place, the industry has been willing to invest heavily to develop the sector further, with these investments having been focussed in two areas in particular: (i) consolidation and modernization of the beet processing sector and (ii) intensify beet production and secure greater raw material supplies for their factories.