Sugar imports by China may rise 42pc on domestic output
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