Date
19 September 2017
Trucks loaded with sugar cane arrive at a sugar processing plant. China's sugar industry is facing a second year of losses. Photo: Bloomberg
Trucks loaded with sugar cane arrive at a sugar processing plant. China's sugar industry is facing a second year of losses. Photo: Bloomberg

China sugar industry headed for 10 bln yuan loss

China’s sugar industry is expected to suffer losses of more than 10 billion yuan (US$1.24 billion), partly due to soaring imports, China Business News reported Monday.

The sector is on course to report a second straight year of losses as high inventory and softening prices continue to squeeze profit margins, the report said, citing a senior industry official.

Imports account for about 30 percent of the nation’s sugar demand. The price gap between the domestic and international markets has widened since late 2012 to a high of 700 yuan per metric ton early this year.

The price difference has come down to 200 yuan to 300 yuan thanks to a production cutback that has lifted international prices.

Last year, sugar producers grappled with lackluster profits. Guangxi Guitang Group Co. saw its sales revenue slump 16 percent to 426 million yuan from 2012, with gross profit margin down 7.27 percentage points to 4.92 percent year on year.

Nanning Sugar Industry Co. reported a loss of 260 million yuan in 2013.

The central government recently announced a three million ton sugar stockpiling program to help shore up the domestic market.

Authorities in Yunnan and Guizhou have taken similar measures. However, the program may not have an immediate impact on market prices as the policy mainly provides subsidies for bank loans to sugar producers, industry sources said.

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