China in no rush to buy sugar despite price correction – analyst
Band Marcelo Teixeira
NEW YORK, January 11 (Reuters) – Chinese sugar imports will remain low and well below last year’s levels, despite recent weakness in raw sugar futures, as Chinese sweetener prices fall and ocean freight remains expensive sugar consultancy firm CovrigAnalytics said on Tuesday.
“The decline in Chinese domestic prices is not surprising as domestic production is picking up and, on a seasonal basis, will peak by the end of January,” CovrigAnalytics said.
In addition, China has already imported significant volumes of sugar in 2020-2021 (nearly 6.7 million tonnes – 83.5% of raw materials) and far more than the existing annual structural deficit of around 4 , 8 to 5 million tonnes, “he said in a report.
Raw sugar futures on ICE fell to 17.6 cents a pound on Monday, the lowest in more than five months, amid rains in Brazil and abundant production in India and Thailand. Prices partially recovered on Tuesday. SOF / L
CovrigAnalytics said that during the sugar growing season from October 2020 to September 2021, China imported 2.2 million tonnes more than it needed and the country is in no rush to buy.
China is among the world’s three largest importers of sugar, along with Indonesia and the United States.
The consultants said the sugar market needs to find some support to avoid further losses. This could come from new purchases from refiners in other countries as prices seem more attractive or from a resumption of purchases from funds that have recently liquidated part of their long position.
(Reporting by Marcelo Teixeira; Editing by Christian Schmollinger)
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