China is planning to sell 411,800 tonnes of sugar from state reserves to meet domestic shortfall after drought in major growing areas reduced production, the government said on Friday. The sugar for auction includes 150,000 tonnes of raw sugar from Cuba with five cargoes to arrive from end-June, part of the 400,000 tonnes China imports every year under a bilateral government agreement. "The sale is to meet the market demand and stabilise sugar prices," said the National Development and Reform Commission on its Web site at www.sdpc.gov.cn.
The Cuban sugar and 11,800 tonnes of domestic refined sugar will be sold by auction on May 31, the commission said. Another auction for 130,000 tonnes of raw sugar would be held on June 21 and a third lot of 120,000 tonnes would be sold on July 5, it said.
The commission said domestic sugar output was seen at 9.2 million tonnes for the year ending in September 2005, which was 800,000 tonnes lower than in the previous year.
The auction would help ease domestic shortages after the worst drought in 50 years in Guangxi had reduced output by half a million tonnes, a China Sugar Association official said. The association estimates China's deficit at one million tonnes, of which half is to be soured from the world market. The commission said the initial bidding price was set at 2,500 yuan ($302.1) per tonne for raw sugar and 2,900 yuan per refined sugar.
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