Abstract
Research Background
Sugar market witnessed lots of changes in the 2006/2007 campaign affected by
some influencial factors, such as droughts and output accumulation in
producing regions, macro-adjustment, dramatic consumption, etc, so price
change is unavoidable.
Several factors will greatly influence the new 2007/2008 campaign:
1 Output
Acreage of sugar cane in the 2006/2007 campaign expanded from the previous
campaign thanks to more profit generated from sugar cane crops. At present,
sugar cane has been entirely harvested in the North, while main producing
areas in the South is going through dry conditions. How will it influence the
output in the South? How will it affect the total output this year?
2. Consumption
Domestic sugar consumption reached 12.5 million tons, surpassing the previous
campaign by 1.8 million tons, which is out of expectation among insiders. And
the main reason is that starch sugar and other substitutes are less
competitive due to drowsy. What will be the same situation happened to the new
campaign? Whether consumption will increase on a large margin from previous
campaign pushed by the economy in 2008 Olympic year?
3. Import and export
What will the supar price change under the background of oversupply in
international sugar market? What kind of measures will be taken to protect
domestic sugar industry under the macro-adjustment?
4. Policy trend
Policies influence the supply and demand relation dramatically. Major
producing areas in the 2005/2006 campaign suffered from drought, so output
declined by 4%. State reserve was sold by 12 times, reaching 1.2 million tons
in 2006, as to relieve the situation of demand exceeding supply in domestic
market. How will central government move in the coming new campaign?
On the basis of systemic analysis on macro-adjustment, production, sale,
import and export, etc, this report will make an evaluation to the market in
the 2007/2008 campaign in order to provide reference for insiders in China
sugar industry.
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