Insight Focus
China suspended imports of liquid sugar and premix powder from Thailand. Vietnam could be next.
Importers Advance Pace to Cope with Potential Control
November turned out to be another strong month of liquid sugar and premix powder imports. China imported 123 thousand tonnes of liquid sugar and 97 thousand tonnes of premix powder in Nov 2024.
This may be a response to the recent uproar over controls on liquid sugar and premix powder imports. Importers were trying to advance as much as possible to avoid goods getting stuck at customs. This is very wise as the rumour seems to have been confirmed. According to China customs, 34 Thai manufacturers of liquid sugar and 24 of premix powder are now in state of “suspended import”.
Shifting origins to other ASEAN countries is also probably not feasible. Last week we heard that Vietnamese producers got a similar notice about a food safety audit, although their import status has not been suspended yet. We expect imports from December onwards to be affected.
It’s too early to say how this will affect the trade flow. Importers are not overly pessimistic, and producers are confident of their ability to meet customs food safety requirements. From the perspective of Chinese officials, the attitude toward the product also seems to be more in favor of control than ban.
But it should halt imports of liquid sugar and premix powder at least for a few months, probably after the cane crushing peaks, depending on Chinese inspections of Thai and Vietnamese producers.
With the ban on the import of white sugar into premix powder in the CBZ (comprehensive bonded zone), and the suspension of direct imports of liquid sugar and premix powder, China’s demand for white sugar in the 24/25 season may be less than half of that in the 23/24 season, that is, less than 1 million tonnes.
Accordingly, Thai white sugar may need to find new homes or switch to raw sugar supply. And China will need to increase raw sugar imports to make up for the shortfall. Is it viable for Chinese AIL raw sugar imports or will it allocate extra quotas like it did last season? We will discuss it in a separate report.
