Sugar gap may boost imports
Source: Bloomberg News |
November 2, 2011, Wednesday
|
Print Edition
Print Edition
A SUGAR deficit in China, the world's second-largest consumer, may be 2.5 million tons in 2011-2012, spurring an increase in imports, according to Liu Hande, vice secretary-general of the China Sugar Association.
Production may be at most 11.5 million tons, which compares with estimated consumption of 14 million tons, Liu has said. The government projects about 12 million tons, Liu said.
Chinese buying may lift prices, which have dropped almost 30 percent since reaching a three-decade high in February on rising supply and concern the European debt crisis will curtail the global economic recovery. Imports into China may climb 20 percent in 2011-2012 as local consumption outpaces production, according to Morgan Stanley.
"Given the production deficit, China is likely to rely on imports to bridge the shortfall," Liu said.
China's imports may rise to 2.75 million tons in 2011-2012, according to the London-based International Sugar Organization. Supplies will lag behind demand by 2.2 million tons, it said. Shipments have jumped 22 percent to 1.7 million tons in the first nine months, according to customs data.
China will import sugar to ensure domestic supply and replenish stockpiles, said Liu Xiaonan, vice director of the economy and trade division at the National Development and Reform Commission.
"We will have to control the pace, volume and timing," Liu said.
State sugar stockpiles are at the "lowest in history" after intensive selling, said Nong Guang, secretary-general of the China Sugar Association's Guangxi division. Nong did not elaborate.
The Chinese government sold 1.86 million tons of sugar from stockpiles in nine auctions in the year that ended September 30, to keep the market well supplied and stabilize prices amid soaring inflation, the association said.
Output was 10.45 million tons in 2010-2011, declining for the third year as drought and frost reduced cane yield and high labor and other input costs discouraged farmers from expanding crops.
The Guangxi Zhuang Autonomous Region, China's largest producer, will lift output to 7 million tons in 2011-2012, up from 6.75 million tons a year earlier as favorable weather and government support helped farmers expand crops, Nong said.
Production may be at most 11.5 million tons, which compares with estimated consumption of 14 million tons, Liu has said. The government projects about 12 million tons, Liu said.
Chinese buying may lift prices, which have dropped almost 30 percent since reaching a three-decade high in February on rising supply and concern the European debt crisis will curtail the global economic recovery. Imports into China may climb 20 percent in 2011-2012 as local consumption outpaces production, according to Morgan Stanley.
"Given the production deficit, China is likely to rely on imports to bridge the shortfall," Liu said.
China's imports may rise to 2.75 million tons in 2011-2012, according to the London-based International Sugar Organization. Supplies will lag behind demand by 2.2 million tons, it said. Shipments have jumped 22 percent to 1.7 million tons in the first nine months, according to customs data.
China will import sugar to ensure domestic supply and replenish stockpiles, said Liu Xiaonan, vice director of the economy and trade division at the National Development and Reform Commission.
"We will have to control the pace, volume and timing," Liu said.
State sugar stockpiles are at the "lowest in history" after intensive selling, said Nong Guang, secretary-general of the China Sugar Association's Guangxi division. Nong did not elaborate.
The Chinese government sold 1.86 million tons of sugar from stockpiles in nine auctions in the year that ended September 30, to keep the market well supplied and stabilize prices amid soaring inflation, the association said.
Output was 10.45 million tons in 2010-2011, declining for the third year as drought and frost reduced cane yield and high labor and other input costs discouraged farmers from expanding crops.
The Guangxi Zhuang Autonomous Region, China's largest producer, will lift output to 7 million tons in 2011-2012, up from 6.75 million tons a year earlier as favorable weather and government support helped farmers expand crops, Nong said.
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