October 16, 2014

Chinese sugar production will fall by 1 million tons to 13.3 million tons in the upcoming 2014/15 season beginning this month according to the U.S. Department of Agriculture Beijing bureau.  Cane acreage in Guangxi has fallen by 7% while acreage in Hainan has dropped by more than 20% as low prices restrict production.  Other analysts forecast even lower output.  Platts Kingsman forecasts Chinese sugar output for 2014/15 to be 13.04 million tons based upon damage from typhoons and cane plants that are shorter than then same time last year.  Green Pool estimates output of 12 million tons based also on typhoon damage, and the official U.S. Department of Agriculture’s (USDA) forecast is for 12.9 million tons.  Despite these production estimates being well below the country’s demand of 17.4 million tons it will do little to affect prices or raise imports as China’s sugar stockpiles are so huge.  The USDA forecasts that China will import 3.8 million tons – 300,000 tons less than last year and the lowest since 2010/11, giving little hope that higher Chinese imports will lessen the ongoing global sugar surplus.

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