By Marcelo Teixeira
NEW YORK, Jan 11 (Reuters) – Chinese sugar imports will remain low and sharply below last year’s levels, despite the recent weakness in raw sugar futures, as the sweetener’s prices in China fall and ocean freight stays expensive, sugar consultancy CovrigAnalytics said on Tuesday.
“The drop in Chinese domestic prices is not surprising as domestic production is picking up and on a seasonal basis shall reach a peak by the end of January,” CovrigAnalytics said.
“Moreover, China has already imported significant sugar volumes in 2020-21 (close to 6.7 million tonnes – 83.5% raws) and much higher than the existing structural annual deficit of about 4.8-5 million tonnes,” it said in a report.
Raw sugar futures on ICE fell on Monday to 17.6 cents per pound, the lowest in more than five months, amid rains in Brazil and ample production in India and Thailand. Prices partially recovered on Tuesday. SOF/L
CovrigAnalytics said that during the sugar production season of October 2020 to September 2021, China imported 2.2 million tonnes more than it needed and the country is in no rush to buy.
China is among the three largest global sugar importers, along with Indonesia and the United States.
The consultants said the sugar market needs to find some support to avoid further losses. That could come from fresh buying from refiners in other countries as prices seem more attractive or from a resumption of buying from funds who liquidated part of their long position recently.
(Reporting by Marcelo Teixeira; Editing by Christian Schmollinger)
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