- The Chinese government issued more raw sugar import licenses last week; 140k tonnes in total.
- This means 1.59m tonnes of additional licenses have been issued so far this year.
- The volume of raws quotas and AILs could reach 3.5m tonnes, but with import demand above 4m tonnes, refineries may have to carry 1.5m tonnes into 2021.
China’s Government Allows More Raw Sugar Imports
- Six Chinese refineries received additional raw sugar import licenses last week (140k tonnes in total).
- With this, 16 refineries and four trade houses have had their annual processing capacity registered (6.9m tonnes).
- However, it’s unlikely they will receive the full volume of import licenses.
- With the time it’s already taken, we think just 0.65m tonnes of additional import licences, on top of the first batch of 1.35m tonnes, will be issued in 2020.
- However, we think the refineries may have already bought most of the sugar they require.
- This means there will be just a few purchases even if the additional 0.65m tonnes of imports are granted.
- With this, demand sits in a range of 4-4.5m tonnes, with 3.4m tonnes currently filled, meaning China’s refineries may carry a record 1.5m tonnes of raw sugar into 2021.
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