by Meng Lingjuan

"We know little about the import of Pakistani sugar. " Jia Zhiren, chairman of the China Sugar Association (CSA), and Hu Zhijiang, vice chairman of CSA, said at the World Sugar Seminar on May 25, they both kept silent on the reporter's questions.

The 2019 China Sugar Expo and World Sugar Seminar was held in Guangxi, a province whose produced sugar accounts for 60% of China's total sugar output. At the venue of hundreds of people, can the reporter find any signs of the previously reported 300 thousand tons of imported Pakistani sugar?

"I've been studying sugar all my life, but I still don't know who's in charge of the sugar price," Jia Zhiren, who did not respond directly to the sugar issue, was the first speaker at the seminar, pointing straight at the price of sugar.

According to Jia Zhiren, China's sugar-making enterprises lost 1.9 billion yuan last year, and most of the main producing areas are in the border, and poor areas with leftover children and the elderly, including Xinjiang, Inner Mongolia, Guangxi, Yunnan, and Guangdong. China's sugar farmers is about 40 million, and their income contributes around 70% of the sales income of sugar enterprises.

A Chinese sugar farmer tried to know something about Guitang No. 42, the name of a sugarcane variety, at the China Sugar Expo in Guangxi on May 26.

Huang Qilong (right), from Guangxi Tianjie Agricultural Technology Co., Ltd., and Hao Rui (left), chief engineer of Babiyun Intelligent Technology Co., Ltd., introduced that spraying drones with six heads can spray pesticides or herbicides on 21 mu (14,000 square meters) sugar canes in 15 minutes at the China Sugar Expo on May 26.

Such a high proportion of sugar farmers' income mainly refers to the purchasing price of sugarcane, that is, the raw material price from sugar enterprises. At the intervals of the meeting, Xu Sheng, a senior researcher of white sugar at the agricultural sector from Shanghai Chaos Investment Co., Ltd., analyzed 3 reasons why the purchasing price of sugarcane in China could not be reduced, namely, the difficulty of mechanized planting, the increase in labor costs, and the rigidity of land rent. "There are many sloping fields in the south, it is difficult to drive jeeps, let alone popularizing mechanized production. Now that sugarcane cutters have been paid no less than 120 yuan per mu of land, the sugar factory will not be able to bring down the purchasing price of 490 yuan per ton for sugar farmers," said Xu Sheng.

The reporter captured sugar information on and off the stage, while the guests were talking about sugar prices. Guangxi Yangpu Nanhua Sugar Industry Group Co., Ltd.’s president Feng Xiaohua, and executive vice president Jiao Nianmin, have raised more than 3 questions about sugar prices at the seminar. Feng Xiaohua is one of a hundred outstanding private entrepreneurs on the 40th anniversary of the reform and opening up, and the only representative from private enterprises in China's sugar industry.

Wang Jiabo, a senior researcher of SDIC ESSENCE Futures, joined in the sugar price discussion, "Recently, some sugar farmers have seen a fall in sugar prices and a rise in fruit prices, so they intended to give up sugarcane planting, turn to fruit planting. Next year, Guangxi may have competition in the plant area, if this figure falls domestically, we will see a rising market. "

In the process of exploring the sugar mark, various views, remarks on sugar price remind the reporter of the nickname "demon sugar", since the domestic sugar commodity prices go ups and downs, and with unpredictable mystery. The market mentioned above is the domestic sugar prices.

When talking about domestic sugar prices, the most discussed "sugar #11"-- New York raw sugar futures, FOB prices of 29 sugar producer around the world, which is an indicator of international raw sugar prices. Moreover, the key factor that connect domestic and international sugar prices is import tariff. In 2019, the in-quota tariff rate of 1.945 million tons imported sugar in China is 15 %, and the out-quota import tariff is applied to trade guaranteed rate of 85%, with 70 % difference between. "Every country has protection measures against its domestic sugar prices, so does the United States and Japan. Japan has the highest import tariffs of 100 %. "said Wang Jiabo.

The price of sugar No.11 on May 22

The price of Sugar No.11 would drop to 11.62 cents per pound, $256 per ton (about 1,856 yuan), after a likely rebound from 85% to 50 % a year later, Brazil's Ministry of Agriculture said on May 21. While on the same day, the spot prices of domestic coastal ports were between 5,300 yuan and 5,400 yuan, and the price difference between futures and spot was 3,544 yuan per ton.

According to the survey data from the research group of the Agricultural Trade Promotion Center of the Ministry of Agriculture, the price of sugar #11 ,with additional out-of-quota tariff, freight charges, and refined processing in China, tumbled to 3,900 yuan in September 2014. Even though the average price of domestic sugar had sunk to the lowest in the same period, it is 100 yuan higher than the refined after-tax price of imported raw sugar. Therefore, it is self-evident that the industry is sensitive to international sugar imports, especially low-priced imported sugar.

"Pakistan will certainly benefit from selling sugar to China with high sugar prices, but their low-priced sugar will bring impact on our domestic market. And China's 40 million sugar farmers will absolutely have to surrender part of the profits. As far as we know, 182,000 tons of Pakistani sugar has gone through customs clearance, whether the next 120,000 tons will be settled within the year, I don't know yet. " Xu Sheng was the first among the participants to mention Pakistani sugar.

The seminar began at 9: 00 a.m. and ended at 5: 50 p.m., during which no one left, and all the guests were asking for advice and exchange ideas with each other at the tea break. After the seminar, the reporter found Jiao Nianmin in the crowd. In Jiao 's daily records, the price of sugar after customs clearance is 250 to 300 yuan per ton lower than that of the domestic spot. Pakistani sugar is of large particle, slightly yellow color, many impurities and unstable quality. “These sugar does not come in at once. A few containers enter every time, and every time it has an influence on the market price. However 'Batie' is our country’s iron brother. In addition, it is normal to make up for the gap in the domestic market through imports. "

Since the domestic sugar industry is so concerned about the import of Pakistani sugar, the total sugar import and its distribution among the major sugar-producing countries is also the core concern. Jia Zhiyan told us that China's annual average import of sugar from 2011 to 2018 was 3.46 million tons. "China's total import each year is planned. If there is more of this, there will be less of that," he said.

Eduardo Leao de Sousa, Executive Director of Brazilian Sugarcane Industry Association, was interviewed by Economic Daily-China Economic Net.

Brazil is the world's largest exporter of sugar, with 56% of China's sugar imports coming from this country. Eduardo Leao de Sousa, executive director of the Brazilian Sugar Industry Association, did not showed much concern about the quota of Brazilian sugar export to China this year, but said a few months ago there was news that Brazilian sugar exports to China could reach 1 million tons in the future. "If it achieves this figure, it would not be a small number, accounting for almost 20% of China's total imports. However, we do not have any reliable or credible information yet. Martin Todd, general manager of UK LMC International, believes that Pakistan does not have a sustained supply capacity for sugar exports and has a higher probability of one-off export to China.

In mid-April, on an interview in Lahore, Pakistan's second largest city, Abdul Razak Daud, commercial adviser to the Pakistani prime minister, said that China's first $1 billion special access for Pakistan, including sugar, rice and yarn, has been launched. And as this first $1 billion agreement is completed, China will grant a second $1 billion special access. The director-general of the International Sugar Organization, Joseph Orif, believes that Pakistan has sugar stocks this year and that special access next year is likely to be replaced by other categories.

A retail price list of sugar in Pakistan provided by a white sugar researcher at the World Sugar Seminar on May 25.

A sugar researcher, who spoke on condition of anonymity, gave the reporter a retail price list of sugar in Pakistan. “After the export to China, the price of sugar in Pakistan has gradually risen, rising by over 20% in April compared with the same period last year. As far as we know, sugar may not be expected to be exported next year. "

"We hope to export to China with no favorable price. We can provide 1 million tons a year, but now the quota is very small. Abinash Verma, director-general of Indian Sugar mill Association, told the reporter. According to Wilma, India's annual sugar production has reached 32.5 million tons, and the inventory will continue to increase next year.

Can Pakistan buy sugar from India first? This is the question that the reporter was asked before leaving the seminar. Looking for sugar information all day, the reporter has seen the "demon" of sugar at the same time.

"There is no 'two-step method' for making sugar in India. They do not make raw sugar, only white sugar. The shelf life of white sugar is only 18 months. While raw sugar has no shelf life, which belongs to strategic supplies," a worker from China Oil and Foodstuffs Corporation told the reporter at China Sugar Expo the next day.

The article is translated by Chen Jinglin.