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China Sugar Market Review & Outlook 2007-2008 Proposal
Beijing Orient Agribusiness Consultant Ltd, Feb 2008
The sugar market witnessed lots of changes in 2006/2007 affected by some influential factors, such as droughts and output accumulation in producing regions together with macro-adjustment, dramatic consumption, etc, so price changes are unavoidable.
Several factors will greatly influence the new 2007/2008 campaign:
1 Output
Acreage of sugar cane in the 2006/2007 campaign expanded from the previous campaign thanks to more profit generated from sugar cane crops. At present, sugar cane has been entirely harvested in the North, while main producing areas in the South is going through dry conditions. How will it influence the output in the South? How will it affect the total output this year?
2. Consumption
Domestic sugar consumption reached 12.5 million tons, surpassing the previous campaign by 1.8 million tons, which is out of expectation among insiders. And the main reason is that starch sugar and other substitutes are less competitive due to drowsy. What will be the same situation happened to the new campaign? Whether consumption will increase on a large margin from previous campaign pushed by the economy in 2008 Olympic year?
3. Import and export
What will the sugar price change under the background of oversupply in international sugar market? What kind of measures will be taken to protect domestic sugar industry under the macro-adjustment?
4. Policy trend
Policies influence the supply and demand relation dramatically. Major producing areas in the 2005/2006 campaign suffered from drought, so output declined by 4%. State reserve was sold by 12 times, reaching 1.2 million tons in 2006, as to relieve the situation of demand exceeding supply in domestic market. How will central government move in the coming new campaign?
On the basis of systemic analysis of macro-adjustment, production, sale, import and export, etc, this report will provide an evaluation of the market in the 2007/2008 campaign in order to provide reference for insiders in China sugar industry.
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