More than half a million tonnes of sugar, mostly from Brazil, are expected to arrive in China in September as the country rebuilds stocks after a prolonged drought hit its main growing region, dealers estimated on Tuesday. The downgrade in output in top producer Brazil and the prospect of Chinese demand have supported New York sugar futures and helped the physical market defy pressure from rising output in Thailand, the world's second-largest exporter.
"Arrivals in September are estimated at between 500,000 and 600,000 tonnes. The majority will come from centre-south Brazil. I believe that will be the case," said a dealer in Singapore. China's sugar demand could outpace output by more than 2 million tonnes in the year to September 2012 after the drought dried up supplies and forced Beijing to release stocks to cool record high prices, a Reuters poll showed. China, which accounts for about 9 percent of global production, imported 776,945 tonnes of sugar in the period from January to July this year, up 8.76 percent as it boosted purchases to rein in domestic futures prices, which struck a record around 7,900 yuan ($1,236) a tonne last month.
China buys sugar from Cuba, Thailand, Brazil, South Korea and Australia. Official data is due out later in September. Yu Xiaoqi, a sugar analyst with Dalu Futures Co, expected China to import a total of 1.5 million tonnes of sugar from August to December.
China's agriculture ministry said some 3.23 million hectares of crops were suffering from ongoing drought conditions in the country's south-west, the main sugar-growing region, with no respite from the dry, hot weather. China may have to brave high global prices to top up inventories estimated by dealers to have fallen to around half a million tonnes - far below the level of three times monthly consumption of 1.08 million tonnes that Beijing typically considers safe.
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