- Chinese refiners and traders imported a record 5.27m tonnes of sugar in 2020.
- The mills have therefore struggled to make sales this season.
- Renewed COVID restrictions also mean summer consumption may be lower than usual.
Record Sugar Imports Hit Domestic Sales
- China imported a record 5.27m tonnes of sugar last year as import restrictions eased and world market prices hit a 10-year low.
- China’s mills have therefore struggled to make sales this season, and their stocks are the highest they’ve been since 2013/14.
- Sales picked up slightly in July, with the mills selling 1.03m tonnes of sugar, up 205.7k tonnes from the six-year average.
- However, COVID restrictions are tighter following a spike in Delta cases.
- · This may impact consumption as around 39% of China’s yearly total comes from soft drinks, which are more widely consumed in the summer.
Have Record Sugar Imports Hit Cane Production?
- Yes, but this isn’t the only reason production will decline next season.
- Many farmers are increasing grains production this year as the country works to feed its recovering pig herd following the outbreak of African Swine Fever.
- The Government has also been promoting rice production since the pandemic began, with food security a top priority.
- Nevertheless, some farmers may be swayed by the various subsidies on offer:
- Farmers cane receive 350 RMB/mu from the Government if they switch to a higher-yield cane variety.
- Farmers could receive 300 RMB/mu from the mills if they switch from other crops to cane.
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