China's demand for refined sugar may be short-lived

Chinese imports of white sugar or refined, should remain strong in the coming months but a stronger government control on imports can restrict shipments in the second half of the year, said traders and analysts.
Sugar futures in Chinese market and international moved in opposite directions since the beginning of the year, creating a large profit margin of up to 70 dollars per ton for importers in China.
The movement caused a strong demand for refined sugar, with 100 thousand tons of imports contracted last month, according to a market source. Others said that the deliveries could reach 200 million tons in May.
However, a stronger control of the Chinese Government on imports of sugar can restrict imports in the second half, said the sources, limiting the benefits for international suppliers like Thailand and Guatemala.
"We still can't see if the demand will rise. The current measures already are pretty tight, "said Zhan Xiao, analyst of Xinhu Futures.
The award of the caster sugar over raw sugar in ICE Futures rose 6.8 percent to a maximum of $ 83.69 per tonne on Tuesday, driven in part by the recent Chinese demand and also by a devaluation of the real.
China's refineries, according to the world's largest consumer of sugar, were pressed for restrictions on imports of raw sugar after the domestic industry complained that shipments from abroad were pressuring prices and domestic demand.
Industries reached a record deal last year to keep imports out of quota of up to 1.9 million tons in 2015. However, with domestic prices shooting 16 percent since the beginning of the year until the beginning of March, while international prices fell, refineries ran behind cheap imports of refined sugar that were not included in the agreement.
"Generally there are about 150 000 tonnes of imports of white sugar every year of Korea, but Thailand and other origins have a high potential this year," said an operator of Singapore.