Output fails to meet demand as nation's taste for sweetener keeps rising rapidly

BEIJING - China's imports of sugar will hit a record high of more than 2 million tons this year, as domestic production fails to keep pace with growing demand, an industry official said.

Xiao Ling, deputy executive general manager of Nanning Sugar Industry Co Ltd, urged the government to help farmers in improving efficiency and output through technological advance, extended industrial chains and training.

Statistics from the China Sugar Association (CSA) show that imports of the sweetener stood at 1.2 million tons from January to August.

"Sugar imports will reach a new high this year, as the nation's demand grows rapidly while output remains flat," Xiao said.

Sugar imports have been on the rise since 2008, when they totaled 779,900 tons, compared with 1.77 million tons in 2010.

"Imports will probably surpass 2 million tons in 2011, using up the sugar import quota that China commits to with the World Trade Organization," which is 1.95 million tons, Xiao said.

Also on Tuesday, Liu Hande, CSA deputy secretary-general, said in an interview that the sugar deficit in China, the world's second-largest consumer, might reach 2.5 million tons in 2011, which would spur an increase in imports.

"Given the production deficit, China is likely to rely on imports to bridge the shortfall," Liu said at an annual sugar industry conference in Hainan province.

Morgan Stanley forecast last week that China's sugar imports will grow by 20 percent in 2011, noting that the nation's consumption exceeds its production. Imports may grow to 2.75 million tons in 2011, according to the London-based International Sugar Organization.

China's sugar consumption has grown by more than 10 percent annually during the past five years, reaching 14.5 million tons last year, said Xiao.

But output has continued to fall during the past three years, Xiao said, affected by several factors including adverse weather, a shortage of suitable land and obsolete equipment and technology.

In 2010, output was 10.45 million tons, down for the third year. Production may be 11.5 million tons at most this year, Liu said, while the Chinese government predicts a harvest of about 12 million tons.

The Guangxi Zhuang autonomous region, China's top sugar producing area, accounts for 65 percent of national production. The region's crop contracted for three consecutive years ending in 2010.

However, output is forecast to increase to 7 million tons in 2011, from 6.75 million tons a year earlier, thanks to government support for improved seeds, technology, fertilizers and machinery.

"The big gap between the nation's production and consumption means China has to import from around the world," said Xiao, and "this will probably push up the sugar price". The price hit 7,379 yuan ($1,1160) a ton on Monday, up from a low of 2,990 yuan a ton in 2009. To stabilize prices and ensure supplies, the government has been releasing sugar from stockpiles, selling 1.86 million tons in nine auctions as of Sept 30.

Nong Guang, secretary-general of the CSA's Guangxi division, said that domestic inventories are at the "lowest level in history" after the auctions.

"The stockpiles are almost zero, and the Chinese government should take more measures to help farmers increase production," Xiao said.

Li Jiabao contributed to this story.

China Daily