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China sugar imports drop 41% YoY: Customs

China sugar imports drop 41% YoY: Customs

BEIJING: The world’s No. 2 sugar importer China,s sugar imports dropped 41.3 per cent in October from a year ago but were still above September volumes as refineries snapped up shipments from a well supplied global market.

The world’s No. 2 sugar consumer imported 416,428 tonnes of the sweetener last month, according to customs data.

That could not match October 2013 levels, when a plunge in global prices made overseas sugar much cheaper than the domestic offering, leading to China’s biggest monthly imports on record at 710,000

China, which imported a record 4.5 million tonnes of sugar last year, is a closely watched buyer that can have a strong influence on global sugar prices.

The price gap between the domestic and overseas market had narrowed in recent months, after Chinese futures followed the global market to a four-year low in September, pressured by huge inventory.

But aggressive discounts on Thai sugar owing to a record crop in the country opened up attractive opportunities for Chinese importers, boosting October arrivals, said Zhan Xiao, analyst at Xinhu Futures.

Imports will remain strong to the end of the year after Chinese prices moved up sharply in recent weeks on the back of news that the domestic crop would be lower than expected.

“There’s currently a 100 yuan profit on out-of-quota imports from Brazil over Shandong spot prices,” said Zhan. Out-of-quota imports are charged tariffs of 50 per cent.

Chinese sugar mills have called for government intervention to stem the flow of raw sugar imports that have taken market share from the domestic industry, exacerbating a build-up in inventory.

Beijing started requiring importers to use a new registration system for out-of-quota imports from Nov. 1 allowing it to monitor demand for imported raws but dealers said it is unlikely to impact trade.