BEIJING: China's sugar imports more than tripled in July from the month before to 280,000 tonnes as traders took advantage of lower global prices, but pressure from domestic inventory looks set to keep full year imports below 2013's record levels.
Benchmark international sugar prices have dropped about 4 percent so far this year due to a glut in global supply, boosting purchases by the world's second-largest consumer of the sweetener. "Prices in the first half were not quite as cheap, so they're trying to catch up now," said a China-based trade source.
He declined to be identified as he is not authorised to talk to the media.
A further 1 million tonnes of sugar is expected to arrive in the August-October period, said Zhan Xiao, an analyst at Xinhu Futures.
The bulk of shipments will come from Brazil but steep discounts on Thai sugar have also attracted buyers in recent weeks, said the trader.
A record crop in Thailand this year and competition from other exporters has forced it to slash its prices. Still, imports will not reach last year's record levels, with domestic prices recently dropping sharply and reducing the appeal of overseas sugar. Last month's shipments were well below the July 2013 level of close to half a million tonnes.
Total imports in 2014 are set to hit 3.4 million tonnes, said Zhan, higher than estimates of about 2.5 million tonnes seen earlier this year, but far below last year's 4.5 million tonnes.
"The main reason is the large stocks. China still has 3 million tonnes of old sugar that has not been sold," he said. Concerns about those stocks and the recent surge in imports have triggered short-selling in the domestic futures market, sending Zhengzhou futures to five-year lows.
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