China’s sugar production in the 2015/16 extracting season (Oct. 2015-Sept. 2016) comes near to an end. To date, except a small quantity of sugar plants in Yunnan Province that are still working, other provinces/ regions have already finished the extracting.

According to statistics from the China Sugar Association (CSA), by the end of April, the output of sugar totalled 8.55 million tonnes, down by 17.05% over 10.31 million tonnes in 2014/15. Specifically,

• Cane sugar: 7.71 million tonnes, down by 19.43%

• Beet sugar: 839,800 tonnes, up by 13.92%

Regarding the sales, by the end of April 2016 also, the figure was up to 4.03 million tonnes, down by 26.05% YoY. The sales rate was at 47.15%, vs. 52.88% in the same period last extracting season. In particular,

• Cane sugar: 3.51 million tonnes, down by 30.92% YoY, sales rate at 45.58% vs. 53.16%

• Beet sugar: 517,400 tonnes, up by 42.10% YoY, sales rate at 61.61% vs. 49.35%

Meanwhile, the stock reached 4.52 million tonnes, down by 6.97% YoY.

It can be seen that the domestic sales and production decreased at the same time. Still, the sugar makers were under certain sales pressure. This was in relation to the sugar price rises. According to statistics from CAS, by the end of April 2016, the sales price of sugar by leading sugar makers was USD839.15/t (RMB5,418/t), up by 14.38% YoY, including:

• Cane sugar at USD838.23/t (RMB5,412/t) vs. USD733.37/t (RMB4,735/t)

• Beet sugar at USD848.60/t (RMB5,479/t) vs. USD742.82/t (RMB4,796/t)

In April 2016 specifically, the sales of sugar reached 542,300 tonnes. The corresponding sales price was USD844.58/t (RMB5,453/t), involving cane sugar at USD840.86/t (RMB5,429/t) and beet sugar at USD893.05/t (RMB5,766/t).

Now the domestic sugar price is still under upward trend. This indicates that the starch sugars, prices of which are under downturn, will further substitute sugar in food and beverage industries and will threaten the sales of sugar.

As a whole, the sugar price in China is expected to grow further in 2015/16. This is mainly because:

First, as the extracting season comes near to an end and the total output of sugar decreases significantly, the sugar price will be strongly supported to rise.

Second, the Chinese government is intensifying the fight against sugar smuggling, beneficial to price stability. If policies are issued to restrict the imports of sugar, the domestic sugar market will be reactivated further.

Third, the output of sugar also declines in India in 2015/16, which consequently has pulled down its sugar price and exports. The political changes in Brazil have resulted in BRL appreciations, which may restrict its sugar exports, further push up the international sugar price and help stabilise and level up China's sugar price.

Production and sales of sugar in China in 2015/16 extracting season

Source: China Sugar Association

This article comes from Sweeteners China News 1605, CCM

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