BEIJING: China imported 485,027 tonnes of sugar in July, up 72.7 per cent on a year earlier, as refiners took advantage of cheap overseas prices, customs data showed here the other day.
China, one of the world’s top sugar importers, has snapped up sugar from global exporters this year, as prices moved in the opposite direction to relatively pricy domestic sugar.
Global sugar prices hit a seven-year low earlier this month, due to pressure from a large cane crush in top producer Brazil’s main growing region.
China’s domestic prices, meanwhile, have been kept high by government curbs on imports aimed at protecting domestic sugar mills and a sharp drop in local output, leading to profit margins of more than $250 per tonne for imported sugar.
China’s sugar imports in July more than doubled on the prior month thanks to some late arrivals of cargoes.
Imports were also boosted by large volumes of white or refined sugar from Thailand and Guatemala, although these shipments may tail off in coming months, said Josh Rossato, analyst at Brisbane-based Green Pool Commodities.
“We think that buyers may have been awarded licences earlier in the year and need to bring them in prior to their upcoming expiry,” he said.
China has called on refiners to limit their sugar imports in a bid to protect the domestic milling sector. Importers need to register shipments that fall outside of low-tariff rate quota purchases under a government monitoring system.
With huge profit margins on imports, policy remains the only factor keeping shipments in check, said traders, noting that China’s recent surprise devaluation of the yuan would have no impact.
“The profit is so big so losing a few dollars is nothing,” said a China-based trader who declined to be identified.
