Chinese authorities will release the first batch of sugar reserves this year to stabilize supply and prices, the country’s top economic planner announced on Friday [30 September 2016]…Full Article: Oct 2016

Key Point

  • According to the National Development and Reform Commission (NDRC), China plans to sell 350,000 MTs of sugar from its state reserves at CNY 6,000 (US$900) per MT.

ChinaAg Comments

  • In March 2016, Chinese authorities have launched a “Gateway Sword 2016” campaign (ends on 31 December 2016) in order to close 227 illicit border crossings into Guangxi, increase border patrols, and combat the influx of smuggled sugar, grain and frozen food. At the same time, according to a Chinese sugar industry expert, China has a 2 million MT per year sugar supply gap as the country’s output and imports total 14 million MTs, while consumption totals 16 million MTs annually. As a result of the sugar smuggling, China’s domestic sugar prices have not declined.The price of sugar in Guangxi Region was approximately CNY 5,400 per MT [~US$834 per MT].
  • In January 2016, Guangxi Region canceled a regulation that permitted individuals to import 1 kg of sugar per day.
  • In 2015, Chinese sugar imports spiked owing to cheaper prices on the international market (vs. domestic prices). A large of amount of these imports were held in bonded warehouses for failing to register and pay duties. As of late 2015, China reportedly had 500,000 MTs to 800,000 MTs of sugar in bonded warehouses waiting for customs duties to be paid.
  • From the 2014-15 to 2015-16 season, Guangxi’s sugarcane production area decreased by 100,000 ha to 800,000 ha.
  • In 2014, China introduced a new registration system that required sugar importers that don’t qualify for the low import tariff quota to secure permits before their sugar clears customs. China was hoping to cap 2015 sugar imports at 3.8 million MTs.
  • In 2013, China produced 128.2 million MTs of sugarcane crops (unprocessed sugarcane). Guangxi produced 81 million MTs of approximately 63% of the country’s total output.
  • In China, sugarcane production is centered in the southern regions, whereas beetroot production primarily occurs in the north. In 2011, Guangxi province produced 72 million MTs of sugarcane or 64% of China’s total output. Neighboring Yunnan and Guangdong provinces produced 18.9 million MTs (17%) and 13.9 million MTs (12%), respectively.

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