Russia has significantly increased its exports of raw beet sugar to Uzbekistan, reaching an impressive 8.300 tons since the commencement of the current season. The transit of raw materials from the bustling port of Novorossiysk to Uzbekistan has concurrently amounted to 10.400 tons within the span of the current month.
This surge in raw beet sugar exports has caught the attention of Uretail analysts, who believe that the supply of raw beetroot could emerge as a viable alternative for Russian exporters. The rationale behind this shift is rooted in the possibility that the import of white sugar to Uzbekistan might become financially unfeasible due to escalating import duties and excise taxes.
The current market dynamics showcase the cost-effectiveness of raw sugar exports from Russia. Presently, a ton of raw sugar is priced at $595, with an additional approximate cost of $60 per ton for its delivery to the Black Sea port, factoring in the premium for polarization. Further expenses of around $20 per ton are incurred for each ton during transshipment by rail.
When considering these costs, the total expenditure per ton reaches approximately $675, excluding any supplementary payments. Analysts argue that the logistics involved in transporting raw beet sugar to factories in Kazakhstan and Uzbekistan are not only shorter but also more cost-effective than importing white sugar under the current tax and duty structure.
Russia and Uzbekistan have maintained historically close relations, driven by economic and geopolitical considerations that encourage the two nations to strengthen their connection. Uzbekistan holds a crucial strategic position in Central Asia for Russia, given its border-sharing status with all Central Asian states (Kazakhstan, Kyrgyzstan, Tajikistan, and Turkmenistan) and Afghanistan. Additionally, Uzbekistan's significant control over a substantial portion of the agriculturally rich Fergana Valley, along with its substantial population and reserves of oil and natural gas, make it strategically important for Moscow.
The majority of Russian exports to Uzbekistan primarily comprise industrial goods, accounting for 42.3% of the overall supply of manufactured items to Uzbekistan. Machinery and transport equipment constitute 6.5% of the exports, along with food products.
Despite significant shifts in Russia's trade and economic relationships due to the Ukraine conflict, this has surprisingly had a positive impact on the Moscow-Tashkent alliance. This is evident in the increasing momentum in trade, investment, and people-to-people interactions. While the resolution of the Ukraine issue remains uncertain, the favorable trends in the Russia-Uzbekistan relationship over the past two decades suggest that these positive dynamics will likely persist in the years to come.
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