China's sugar imports are expected to rise to more than three million tonnes a year by the turn of the decade as consumption overtakes local supply, an industry official said on Thursday.
"Very soon, probably in one or two years' time from now, China's sugar supply will be in a net deficit position," Sherif Hassanein, regional general manager for British Sugar, told Reuters on the sidelines of a trade conference in Malaysia.
"So, they will be requiring increased imports to satisfy the increased consumption," said Hassanein, who heads the Chinese operations of British Sugar, which is the country's fifth largest sugar producer.
Hassanein said China's sugar imports were forecast to touch 3.4 million tonnes by 2009 from just 775,145 tonnes last year.
Despite a lower crop in 2004, China, a key importer whose buying intentions move global prices, was not expected to import more than 600,000 tonnes due to high prices, Hassanein said.
Under World Trade Organisation commitments, China can import up to 1.945 million tonnes of raw sugar this year.
Some traders still think it will import more than a million tonnes of sugar in 2004 due to a smaller crop for 2003/04 and to sate demand seen at 11 million tonnes - about 1.2 million tonnes above output. But Hassanein said China had only bought around 50,000 to 100,000 tonnes so far.
He said it was expected to import another 400,000 by the year-end to fulfil a bilateral agreement with Cuba.
China produced 9.8 million tonnes of sugar in 2003/04, down from 10.6 million tonnes in the previous crop.
Hassanein sees the 2004/05 crop output at a similar level due to reduced growing areas.
The shortfall in 2004 supply could be offset by releasing government sugar stocks, estimated at a total of 1.4 million tonnes, Hassanein said.
The government has announced it will consider releasing the stock if the domestic price hits 3,000 yuan/tonne ($362/tonne).
Domestic sugar was quoted at 2,900 yuan/tonne on Thursday, up from 2,700 yuan last month.
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