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  • The ongoing Coronavirus epidemic (2019-nCov) has slowed sugar demand, limited transport, shut down factories and caused offline catering to significantly reduce.
  • The 19/20 cane crush has also been poor and sugar production may be lower than expected.
  • Pay attention to the Coronavirus’ developments as the production and sales data for January will be released soon.

Market News Update

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Sugar Prices

  • Some sugar groups have stopped quoting prices because factories have not resumed operations.
  • Nanhua Group’s quotation has gone down to 5780-5870 yuan/mt. The physical premium is in the range of 26-116 yuan/mt.
  • ZCE futures price quickly rebounded to 5754 yuan/mt after falling 200 points on February 3rd due to the impact of the coronavirus.
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Lower 19/20 Sugar Production

  • Current 19/20 sugar production forecast is 10.2mmt, 300kmt lower than CSA’s (China Sugar Association) forecast.
  • This is mainly due to the dry weather in 2019, leading to a poor cane performance.
  • Guangxi’s sucrose yields by December was much higher than last season’s, which partly offset the lower cane production.
  • However, crushing pace could be affected by the epidemic which may lead to a lower sucrose yields and therefore a lower sugar production.
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2020 Import Licences Could Be Delayed

  • In December, China imported 142k tonnes of raws and 72.9kmt whites and they exported 21.7k tonnes of white sugar.
  • In 2019, 3.7m tonnes of sugar were imported, including 300k tonnes of Pakistani whites; this is a year-on-year increase of 32% (total exports were 185k tonnes).
  • We think there is over 800k tonnes of bondedsugar pending 2020 import licences; but this year’s quota and AIL issuance could delay due to coronavirus epidemic impact.
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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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