Appetite for substitutes to stifle growth in China sugar demand
Wednesday, 28 August 2013 00:16
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Reuters: Chinese demand for sugar will grow only slightly in the crop year to September 2014, stifled by competition from alternative sweeteners and concerns over the economy in the world’s No.2 consumer of the commodity, a senior analyst said on Tuesday.
China, which consumes about 7% of global production, is often seen as a bright spot in an oversupplied global market, but slower demand growth could weigh further on international prices that hit a three-year low in July.
“We are seeing replacement by corn starch. If the Chinese begin to use sugar as gasoline, (demand) will get better. Right now, they only use sugar for consumption,” said Terry Guo, senior research analyst at Bank of China International.
Chinese consumption is estimated at 13.50 million tons in 2013/14, up slightly from 13 million tons in the year to September 2013, Guo said at an industry conference on the Indonesian island of Bali.
He forecast production rising to 13.50 to 14.00 million tons in 2013/14 from 13.10 million tons in 2012/13.
A Reuters poll in June showed that China’s sugar imports could plunge by a third in 2013, with consumers opting for substitute sweeteners as government stockpiling measures push up domestic sugar prices.
Domestic inventory is likely to hit a record high of eight million tons in the next crop year, compared with 7 million tons in the 2012/13, Guo said, without elaborating.
He also noted that faltering economic growth in China would cap demand for sugar.
