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SUGAR in short of supply in China
Beijing – China is now the
world's fourth largest sugar producer, only after Brazil, India, and European Union. In terms of consumption, China is the fifth largest, after India, Brazil and US.
China produced 6.2million tons of sugar in 2000/2001 pressing season. With the market supply falling short of demand, as well as various affective macro controls measures 2001. Stimulated by market demand, as well as various effective macro-control measures by the state, the enthusiasm of farmers to plan sugar –bearing crops has been enhanced greatly. Though china’s sowing area of sugar-bearing crops decreased in 2002 as compared with 1991, china’s sugar output still reached 10.637 million tons in 2002/2003 due to increase in sugar content of sugar crops and in production efficiency of sugar producers.
Sources that have attended the national sugar production and marketing work conference in Guilin held in November 2003 disclosed that china expects to produce 9.87 million tons o sugar in the 2003/2004 sugar refining yea. And this includes 720,000 tons of beet sugar and 9.15 million tons of cane sugar. However due to drought that hit the Guangxi Zhuang Autonomous Region in 2003, a major sugarcane producing area in China, unit yield of sugarcane in the region has
dropped. therefore, China Sugar Industry Association has recently lowered its sugar output estimation for 2004 from 9.87 million tons to 9.5 million tons, and a sugar supply gap of one million tons is expected this year.
According to China Sugar and Wine Company General Manager Wang Xinguo, by January this year, China’s sugar output has decreased by 170000 tons. China’s beet sugar output decreased by 470000 tons, while cane sugar increased by 300000 tons. It is expected that china’s sugar output will stand between 9.5-9.8 million tons in the current refining season while the market demand will be 10.5-10.8 million tons leaving a gap of one million tons, which is most likely to occur around September this year. Wang makes the judgement based on 3 factors:
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China’s sugar output will drop. According to monitoring result by the precautionary system of the Ministry of Agriculture, cane sugar production is in the peak period in South China at present, while beet sugar production is nearing the end in the north. Nationwide, cane sugar production has increased and that of beet sugar has decreased. The purchasing prices of sugar-bearing cops are at comparatively low levels at present, because compared with the other cash crops, the comparative benefit of planting sugar – bearing crops is low, thus dampening the enthusiasm of sugar-bearing crop growers. Related international sugar organizations even predict that china’s sugar output will drop from 11 million tons in the previous year to 9.87 million tons, or even by 9.5 million tons this year.
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Sugar consumption by beverage production will increase further. With sugar output decreasing in this sugar-refining period, the refining period will end ahead of schedule, and china will enter the period of consuming inventories. Meanwhile, sugar consumption by food industry is increasing in China. Take beverage production as an example, china’s output of sugar-containing drinks grew 17.26%year-on-year in 2003 and is expected to keep increasing this year. Thus china’s market demand for sugar is expected to keep rising, likely to top 10.5-10.8 million tons; and sugar inventories may decrease slightly. A report by related international sugar organizations predict that china’s sugar consumption in this sugar-refining season will be 11 million tons, up 8% from the previous year.
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Worldwide, output is decreasing, while consumption is increasing. The world’s sugar output is expected to be 146.99 million tons in the 2003/2004 sugar refining season, dropping for the first time since 2000/2001.F.O. Licht, an authoritative German commodity analytic company, has recently published a report, saying that beet sugar output of EU may drop from the early anticipated 17.4 million tons to 16.5 millions tons in the 2003/2004 sugar – refining year. The report attributes the decrease of beet sugar output in the Western Europe to shrinkage of beet sowing area and unfavorable weather conditions in the summer last year. Brazil has a surplus sugar supply. However, climbing international freight charges have curbed its exports, which is also a reason that restricts China’s imports. Meanwhile, with the world’s sugar output expected to stand at 146.99 million tons in 2003/2004, the world’s sugar consumption is expected to rise to 145.616 million tons, up 2.9%.
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