Sugar im­ports by China may rise 42pc on do­mes­tic out­put

The Pak Banker - - Front Page -

BEI­JING: Raw-sugar im­ports by China, the third-largest pro­ducer, may surge by as much as 42 per­cent in 2010 af­ter do­mes­tic out­put dropped for a sec­ond straight year and de­mand in­creased, ac­cord­ing to a sur­vey.

Pur­chases may reach 1.5 mil­lion met­ric tons com­pared with 1.06 mil­lion in 2009, three of five China-based an­a­lysts and traders said last week.

Im­ports may be at least 1 mil­lion tons, with amounts above that level de­ter­mined by de­mand, the other two said. A to­tal of 1.5 mil­lion tons would be the high­est since at least 2005, ac­cord­ing to cus­toms data com­piled by Bloomberg.

In­creased pur­chases by China may help fu­tures ex­tend a 54 per­cent surge since May that's been driven by stronger global de­mand and dam­age to 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.

"China is likely to step into the mar­ket when the sugar price de­clines, not at the cur­rent level," said Pirom­sak Sa­sunee, chief ex­ec­u­tive of­fi­cer at Thai Sugar Trad­ing Corp., the coun­try's largest ex­porter. "Pur­chases will help sup­port the mar­ket," Pirom­sak, who didn't par­tic­i­pate in the sur­vey, said from Bangkok to­day. Thai­land is Asia's largest ship­per.

Raw sugar for Oc­to­ber de­liv­ery on ICE Fu­tures U.S. in New York closed at 19.96 cents per pound on Aug. 27 af­ter touch­ing a high of 20.32 cents on con­cern that dry weather may hurt out­put in Brazil, the largest grower. The mostac­tive con­tract dropped to 13 cents in in­tra­day trad­ing on May 7.

"It makes no sense for China to buy when New York sugar prices are above 20 cents." -PB News

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