SunSirs: Low Inventory, Sugar Prices is Rising in China
September 08 2023 09:44:59 SunSirs (Selena)
According to the monitoring of the Commodity Market Analysis System of SunSirs, the average price of domestic first grade white sugar at the beginning of the week was 7,340 RMB/ton, and the average price of domestic first grade white sugar at the end of the week was 7,420 RMB/ton, with a price increase of 1.09% and a price increase of 28.77% compared to the same period last year.
In terms of demand, driven by holiday stocking, downstream demand for sugary food procurement has improved, and inventory is generally low in the middle and lower reaches. With the decline of sugar factory inventory, the sales pressure of new sugar before its launch is not significant, and sugar factories have a strong mentality of price support. According to data from the China Sugar Industry Association, as of the end of August, the production and sales rate of sugar in the main production area of Guangxi was 90.15%, an increase of 12.2 percentage points year-on-year; Industrial inventory decreased to 519,400 tons, a year-on-year decrease of 830,000 tons.
From 2022 to 2023, the national sugar production during the squeezing season was 8.97 million tons, a year-on-year decrease of 6.17%, mainly due to a reduction in production in the main production area of Guangxi. As the main sugar producing area in China, Guangxi accounts for about 60% of the country's sugar area and sugar production. In the second half of 2022, Guangxi experienced frequent dry weather, with high temperatures and low rainfall affecting the growth of sugarcane. From 2022 to 2023, the sugar production in Guangxi decreased by 13.89% year-on-year to 5.27 million tons.
The white sugar market maintains a strong trend, and it is expected that white sugar may mainly fluctuate at high levels.
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