SunSirs: China's White Granulated Sugar Demand is Weak and Prices are Falling

Last week, the average price of first-grade sugar was 5646 yuan/ton, and the average price of first-grade sugar on weekends was 5623 yuan/ton, a 0.41% drop in price, and a 2.71% drop compared to the same period last year.

Market analysis

On the domestic front, the high level of external disks has led to higher import costs. Import costs have pushed up domestic futures prices, which in turn drove better domestic spot sales and domestic sugar sales volumes and prices. After the futures prices have fallen back, domestic sugars are also facing a significant decline in both volume and prices, which shows that with ample domestic supply, there is no obvious and continuous improvement on the demand side and it is difficult for the futures prices to continue to rise.

Internationally, Brazil and India are undoubtedly the two countries that have the greatest impact on the global sugar supply pattern. The drought in Brazil has delayed crushing, and sugarcane yields have declined significantly. As the world's largest sugar supplier, Brazil, as the world's largest sugar supplier, forecasts for production cuts and short-term supply declines will inevitably affect the global sugar trade flow, and further support international sugar prices from remote supply.

The global gap in the 20/21 crushing season is expected to expand, mainly due to the decline in production in some major producing countries and the recovery of demand after the epidemic. The expansion of the gap will support the upward shift in raw sugar prices. Entering the second quarter, the trade flow turned into a surplus. However, due to the decrease in sugar cane crush in Brazil's new crushing season and the slowing down of suppression due to drought, international supply is temporarily not sufficient.

Forecast

The domestic sugar supply is abundant, and the high inventory pressure restricts the upward space of sugar prices. There is a lack of momentum for a sustained rise in the short-term. It is necessary to wait for the follow-up bullish factors to stimulate. , It is expected that in the short term, the shock will be the main focus.

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