Decline in domestic sugar consumption

In March, domestic sugar production and sales data was released, and sugar consumption was confirmed to decline. The nationwide monthly sales of sugar in March were 752,300 tons, a year-on-year decrease of 757,900 tons, a drop of more than 100%.

In the 2019/2020 crushing season, as of the end of March, the national cumulative sugar sales rate was 48.61%, a decrease of 0.8 percentage points year-on-year; industrial inventories were 5.0423 million tons, an increase of 40,000 tons year-on-year, and the country entered a peak inventory period.

Due to the presence of imported cases and asymptomatic infections abroad, domestic epidemic prevention and control measures will continue, and recovery of consumption will take some time. In addition, April to May belongs to the traditional sugar consumption off-season, and spot sales are difficult. Starting in March, domestic spot prices continued to slump, and Yunnan sugar prices fell to 5,400 yuan / ton, Guangxi sugar also fell to 5,500 yuan / ton. However, the price reduction did not trigger an increase in trading volume, and the white sugar market entered weak demand and double volume and price. Kill stage.

The supply gap has disappeared

In the 2019/2020 crushing season, as of the end of March, the domestic total sugar production was 9.811 million tons, and the output of each production area was basically settled. The final sugar production in Guangxi is 6 million tons, and the sugar production in Guangdong and Yunnan is expected to be 710,000 tons and 1.8 million tons respectively. In the 2019/2020 crushing season, the total domestic sugar output is 10.1 million tons, a decrease of 660,000 from the previous crushing season. Tons, the rate of reduction is consistent with previous expectations. According to the previous analysis, domestic sugar consumption has decreased by 500,000-600,000 tons, and the gap between supply and demand caused by the reduction in production will be smoothed out, and domestic sugar will be converted to a state of balance between supply and demand.

After the domestic production and sales data is settled, the market focus will shift to the import policy and the control of total imports after May 20. According to data from the General Administration of Customs, sugar imports totaled 320,000 tons from January to February, an increase of 180,000 tons year-on-year; sugar imports were 833.85 million yuan, an increase of 123.4% year-on-year. The cumulative imports in the 2019/2020 crushing season were 1.31 million tons, an increase of 320,000 tons year-on-year. Beginning on May 22, China's sugar mix with additional import tariff level is likely to recover from 85% to 50% level. Taking the import of Brazilian raw sugar as an example, assuming the price of raw sugar is 10.5 cents / lb, the import cost of raw sugar in Brazil at the 85% tariff level is 4,750 yuan / ton. If the tariff is 50%, the import cost drops to 3,900 yuan / ton. Down 850 yuan / ton.