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  • The No.11 raws price fell below 13c/lb on Monday, due to the structural market collapse caused by COVID-19.
  • The ZCE white sugar price fell by 2.57% on the day as well, but spot prices remained firm.
  • This is due to the reduction in 19/20 sugar production and smuggling flows in as well.

Market News   

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Physical and Futures Prices  

  • The No.11 raw sugar price fell to 12.61c/lb on Monday, which was 1.2c/lb lower than the previous week; this is an 8.7% drop.
  • The domestic ZCE white sugar price also fell sharply to 5580 yuan/mt, down 145 yuan/ton from the previous week; this is a 2.5% drop.
  • The price range for Guangxi Grade One sugar was between 5750-5820 yuan/mt and Kunming quoted at 5680 yuan/mt.
  • The firm spot price pushed up the physical premium from 100 yuan/mt to 199 yuan/mt.  
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Domestic Production and Sales  

  • As of the end of February, national factory sugar stock were at 4.8m tonnes, up 800k tonnes YoY.
  • 88% of the stocks were cane sugar, located in the southern China.
  • But sugar mills are not in a hurry to cut prices due to the good sales performance.
  • National factory sales by Feb’20 were 640k tonnes higher YoY, even though 19/20 sugar production was estimated to be 500k tonnes lower than last season.
  • However, the demand for sugar has slowed down due to the impact of the coronavirus.
  • The recovery of consumption will still be crucial to the sugar price as well.
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Smuggling Update  

  • The white sugar flows into China’s neighbouring regions reduced by 32% in January from December.
  • We think February and March flow will remain slow, considering the impact of COVID-19.
  • Current smuggling margins picked up to $230 per tonnes in light of the weak No.5 white sugar price.
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Rosa Li

Rosa graduated from Jinan University in 2012 with a bachelor’s degree in Marketing. Rosa joined CZ in 2014 and has been an analyst for 7 years in our Guangzhou office managing the data capture, analysis and visualisation within the Chinese sugar markets utilising her skills in SQL, Python and VBA while also providing content for our platform CZ App. Rosa is also responsible for the localization of CZ App in China – CZ App WeChat, she also assists with the commercial marketing in China and works towards strategy with the trading team.

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