Report Highlights: 

MY 2014/15 sugar production is forecast at 13.3 million tons, down one million tons from MY 2013/14 on falling acreage. MY 2014/15 and MY 2013/14 imports are revised upwards to 3.8 and 4.3 MMT respectively on lower domestic production and falling international prices.

Executive Summary: 

MY 2014/15 sugar production is forecast at 13.3 million tons, down one million tons from MY 2013/14 on falling acreage. MY 2014/15 and MY 2013/14 imports are revised upwards to 3.8 and 4.3 MMT respectively on lower domestic production and falling international prices.

Production: 

China’s MY2014/15 total sugar production is forecast at 14.3 million tons (in raw value), down 100,000 metric tons from the previous forecast on lower acreage. Sugar cane acreage in Guangxi reportedly declined seven percent, while acreage in Hainan fell by over 20 percent. Lower sugar prices have caused returns on cane to fall below competing crops, such as fruits or cassava. MY 13/14 sugar production is revised down slightly to 14.3 million tons based on updated China Sugar Association statistics. Typhoons in July and September 2014 seriously damaged sugar cane production in Guangxi, Yunnan, Guangdong and Hainan. The government is looking into establishing a target price for sugar cane to help stabilize production. A new target price system, if created, is not expected to be implemented until after MY2015/16.

Consumption: 

Consumption estimates for MY 2014/15 and MY 2013/14 are unchanged at 17.4 and 16.5 million tons.

Trade: 

MY 2014/15 imports are raised 500,000 tons to 3.8 million tons as import demand is forecasted to remain strong due to falling domestic production and lower international sugar prices. MY 2013/14 imports are revised up 200,000 tons to 4.1 million tons on import statistics. Sugar imports in recent market years have consistently exceeded the 1.95 million ton annual tariff rate quota (TRQ) as high domestic prices have made it profitable to import sugar despite high tariffs. Sugar mills have struggled to remain profitable, and are lobbying the government to increase the out-of-quota tariff to 60 percent from the current rate of 50 percent. Domestic producers have also reportedly asked China’s Ministry of Commerce to initiate an anti-dumping and countervailing duty investigation on imported sugar.

Stocks: 

MY 2014/15 ending stocks are raised 200,000 tons to 8.3 million tons as imports are expected to remain strong. Estimated MY 2013/14 ending stocks are also increased 100,000 tons to 8.6 million tons due to higher imports