China will start a new round of stockpiling sugar from the domestic market to try to shore up local prices, a government body said on Monday, a move that could spur more cheap imports by the world’s second-largest consumer. The government will stockpile 300,000 tonnes of sugar in the second round of a state stockpiling programme in the current marketing year which ends in September.
That would lead to state purchases totalling 1.8 million tonnes so far in the year, or 14 percent of domestic output. China’s sugar imports are seen staying high after a record volume of imports in the calendar year of 2012, driven by cheap world prices and expansion of refinery capacities at sugar mills along the coastal areas, said Xiong Zijing, a senior analyst with Hong Yuan Futures.
“The price gap is not as big as that during the last year, but imports are still some 200-300 yuan per tonne cheaper even for buyers without import quotas,” said Xiong, based in Yunnan, the country’s major sugar area. Buyers without import quotas are required to pay a 50 percent import tariff. ICE raw sugar futures hovered on Friday around the lowest levels in nearly three years on expectation of big supplies from top exporter Brazil.
China’s sugar imports in the first quarter of the year rose 6 percent, totalling 528,982 tonnes. Imports in 2012 jumped 28 percent to 3.75 million tonnes. The National Development and Reform Commission (NDRC) said the latest round of stockpiling will start on May 24 at a price of 6,100 yuan ($990) per tonne. The purchase was part of planned stockpile announced late last year.
