Marina Sidak is Head of Analytical Service for one of Russia’s largest sugar producers, Sucden Russia. In our interview with her at the World Ethanol & Biofuels conference, we discussed the market outlook for the two most important sugar beet co-products, molasses and sugar beet pulp, and what can be done to help develop Russia’s fledgling ethanol industry.
“In the previous season as well as the current one, grain prices have remained at a high level. In this case I think that molasses are more competitive, and that demand from the ethanol industry will rise.”
Q: What are the consequences of the increase in the Russian sugarbeet harvest for the molasses and sugar beet pulp markets?
Marina Sidak: Indeed, this season Russia will harvest a record crop of sugar beet. The core reasons are as follows – an expansion in crop area as well as favourable weather conditions. In turn, a big crop and a high extraction rate will lead to high molasses and beet pulp pellets production that should beat the total records for Russia.
Due to the growth of production, exports will also rise, and should reach a record level. Today Russia is the biggest molasses and beet pulp pellets exporter, and with such a base of production growth, it will definitely keep this position in the future.
Q: Do you think that demand for molasses from the ethanol and livestock industries is likely to increase or decline?
Sidak: Well in Russia the ethanol industry always has to choose between grains and molasses in an environment of strong competition between them. Nonetheless, the ethanol industry still remains the key molasses consumer. In the previous season as well as the current one, grain prices have remained at a high level. In this case I think that molasses are more competitive, and that demand from the ethanol industry will rise.
To my mind, molasses consumption within the mixed fodder industry will decrease in line with the decreasing number of cattle in Russia, as molasses unfortunately is not considered an indispensable ingredient in mixed fodder recipes.
Q: What alternative markets is the molasses industry exploring, and which hold the most promise?
Sidak: Over the years, molasses distribution has been changing under the influence of deep processing trends. One of them is desugarisation – in other words, sugar production from molasses. As of today in Russia there are three desugarisation lines, two of which are already working, and the third one is going to be launched this season. Altogether annually they can process up to 400,000 tonnes of molasses.
One more alternative market is betaine production. Although its production in Russia hasn’t been developed yet, I think this is only a question of time. And of course don’t forget about molasses consumption in the bioethanol industry. But this market in Russia is at the beginning of its development. Thus reprocessing of sugar by-products is a big future for the Russian sugar market.
Q: What opportunities is Sucden exploring to make the most of its sugar beet pulp supply?
Sidak: Today Sucden’s four factories produce over 200,000 tonnes of beet pulp pellets. Our mills are located in the central part of Russia – the Volga region – and in the South. That enables us to deliver our produce to any domestic and international customer. We always care about the quality, and the lion’s share of beat pulp pellets is exported. So we will be happy to welcome you as our next client.
Q: What opportunities are presented to molasses producers by the recent legislation on ethanol production in Russia?
Sidak: For the Russian biofuels industry it was really a big step and a sign of progress. This is a very good chance for development further on. However, it requires some time due to a lack of special facilities and infrastructure to use fuel ethanol in the domestic market.
Also, one law is not enough. To develop we need government regulation and support, like in other countries. Another decision could be to export ethanol, but here the issue is in economics – net cost vs price and demand. Anyway, developing the biofuels industry is a very good opportunity to avoid overproduction in sugar and grain markets, as well as diversifying the production portfolio.
This transcript has been edited for clarity.