OREANDA-NEWS  On 02 March was announced, that producer's prices do not exceed the costs for sugar production and distribution. The Federal Antimonopoly Service (FAS Russia) has arrived to this conclusion after inspecting whether increase of wholesale prices for white sugar by the producers was justified.

In January 2009, FAS Russia requested information from the largest Russian sugar producers to have a fuller picture of changes of competitive environment in socially important sectors of the economy, which would enable adopting immediate measures of antimonopoly regulation.

Having analyzed the obtained information, FAS Russia concluded что sugar price movements have a clear seasonal pattern. Increasing ex-works prices in January - May are caused by switching production from beetroots to raw sugar, the cost of which directly depends on the world exchange prices.

Ex-works sugar prices traditionally go down in August-December when the new crop of beet is ready for processing.

The main factors for short-term increase of sugar prices in January 2009:

- The plants switched to processing imported raw sugar (the cost of raw sugar at the New York commodity exchange in January 2009 was 304.26 US dollars per ton, which was 22.2% higher than in 2008);

- Rise in the dollar and growing loan interest rates increased the costs of sugar production;

- The seasonal duty for raw sugar in December 2008 was fixed at USD 220 per ton;

- General economic factors, including growing rates set by natural monopolies.

Analysis of ex-works prices from 2005 to January 2009 has proved that currently ex-works prices for sugar stay at the level of the year 2005.

Based on the analysis of the data submitted by sugar producers on price behavior, FAS Russia has not found any signs of concerted actions. Even when the companies belong to the same group of persons, their pricing policy has been different.

FAS Russia has not received complaints or petitions on antimonopoly violations by sugar producers.

At the same time, FAS Russia will continue monitoring ex-works sugar prices and will initiate inspections of compliance with antimonopoly legislation in the wholesale sector as well as in the retail trade network. Should any sings of antimonopoly violations be revealed, FAS Russia will adopt appropriate measures of antimonopoly regulation.