The executive commission of the customs union of Russia, Kazakhstan and Belarus may approve a lower raw sugar import tariff at a meeting in February for it to become effective from March, a market source said on Friday. "The tariff is not on the agenda of today's meeting," the source told Reuters, speaking on condition of anonymity.
"The plan to set it may be announced today, but no decision is expected. We expect it at the next meeting in February." A Russian government body responsible for drafting customs tariffs recommended on Thursday a cut in the import tariff for raw sugar to $50 per tonne from the current $140 per tonne from March 1.
Russia, the world's third-largest sugar buyer, applies with other customs union members a floating raw sugar import tariff to protect domestic sugar beet industry from excessive imports and pegs it to sugar price in New York. The union has previously applied a seasonal tariff in the range of $50-$250 per tonne from May to July 31. From August to December 31 the upper level of the tariff rose to $270, while from January to the end of April the lower range of the tariff rose to $140.
For the lower tariff to become effective it has to be approved by the customs union executive commission, which meets no less than once a month. Prior to that it has to be endorsed by experts from the three countries, the source said. Kazakhstan is unlikely to oppose the tariff. Rustem Kurmanov, acting director of the Kazakh Agriculture Ministry's processing and food markets department, said any decision by the customs union on the tariff would not affect Kazakhstan.
"We are taking delivery with zero tariff," Kurmanov told Reuters. This dates back to a March 2010 agreement that effectively exempts seven major Kazakh sugar companies from duties under the Customs Union. Belarus declined to comment. "We are not ready to discuss the issue publicly until the (customs union's executive) Commission adopts a co-ordinated decision," Belarus' Foreign Ministry spokesman Andrei Savinykh said.