CHINA: Imports may jump 42% during 2010
Published: 08/30/2010, 7:44:49 AM
Sugar imports by China, the third- largest producer, may surge by as much as 42% in 2010 after domestic output dropped for a second straight year and demand increased, according to Bloomberg.
Raw-sugar purchases may reach 1.5 million metric tonnes compared with 1.06 million in 2009, three of five analysts and traders said in phone interviews last week. Imports may be at least 1 million tonnes, with amounts above that level determined by demand, according to the remaining two. A total of 1.5 million tonnes would be the highest volume since at least 2005.
Increased purchases by China may help futures extend a 54% surge since May that's been driven by stronger global demand and damage to cane crops in Indonesia and Pakistan. China's government has been selling sugar from state stockpiles at a record rate this year to plug a shortfall, according to Gao Wang at Beijing Orient Agribusiness Consultant Co.
"The state reserve will want to gauge China's own crop size before they make plans for overseas purchases," said Gao, an analyst the independent research company, referring to the harvest from October. Gao forecast shipments of 1 million to 1.5 million tonnes.
"It makes no sense for China to buy when New York sugar prices are above 20 cents a pound," Gao said. "Prices will be firm as the temporary shortage might be exacerbated by a delay in the new crushing season," he said on Aug. 27.
Refined-sugar futures on the Zhengzhou Commodity Exchange gained 17% from the year's low on May 18 and the close on Aug. 27. The most actively-traded contract for May delivery was at CNY5,454 (US$802) per tonne at 10:11 a.m. local time Friday. Prices have climbed even amid the state stockpile auctions.
A total of 1.95 million tonnes of sugar-import quotas have been allocated for 2010, with 80% for state-owned companies and 20% for the private sector, Beijing Orient's Gao said. The amount included about 400,000 tonnes from Cuba every year, Gao said.
Imports between January and July were 716,000 tonnes, 17% less than in the same period last year, according to customs data. Still, July's shipments were more than twice the amount a year earlier at a record 305,781 tonnes, the data showed. The top three suppliers are Brazil, Cuba and South Korea.
The government sold about 1.47 million tonnes from state stockpiles in seven auctions in the year to Sept. 30, according to data compiled by Bloomberg News. Beijing Orient's Gao said that volume may be a record, and estimated that more than 1 million tonnes of sugar remain in government warehouses.