According to the monitoring of SunSirs, the average price of white sugar was 6,650 RMB/ton on May 1st, and 6,666 RMB/ton on May 31st, with a price increase of 0.24%. Compared with the same period last year, the price has decreased by 5.87%. The highest price of white sugar in May was 6,696 RMB/ton, and the lowest price was 6,650 RMB/ton.
Sugar prices rose first and then fell in May, and began to decline in mid May. The highest increase in May was 0.36%. The maximum drop is 0.15%.
Phase 1: The main reason for the significant increase in white sugar during the upward phase (May 1st to May 14th) is that the domestic supply of white sugar has shown a growth trend, but production and sales data have improved, and sales speed has accelerated, supporting the rise in early May. 2. The import volume is still relatively low, which is beneficial for boosting the white sugar market.
Phase 2: Downward phase (May 15th to May 31st): The main reason for the decline in white sugar is that domestic supply side domestic sugar has entered a destocking cycle, and industrial inventories have increased year-on-year. 2. The import window for processed sugar opens, and the substitution effect shows that the price of white sugar is weak.
Supply increase: As of the end of April, all sugar mills in other provinces except Yunnan Province have harvested and squeezed sugarcane during the 2023/2024 sugar production period. In April 2024, 380,800 tons of sugar were produced, a year-on-year increase of 58.67%; The cumulative production of sugar during the 2023/2024 squeezing season was 9.9539 million tons, a year-on-year increase of 990,000 tons, with an increase of 11.06%.
Demand increase: In April 2024, sales of 1.012 million tons of sugar increased by 5.86% month on month and 29.74% year-on-year; The cumulative sales of sugar during the 2023/2024 squeezing season were 5.7465 million tons, an increase of 598,200 tons year-on-year, with a growth rate of 11.62%.
Import reduction: In April 2024, China's sugar import volume was 54,300 tons, a year-on-year decrease of 27.44%. The import volume was relatively low, which boosted the domestic sugar market. Brazil is the main importer of white sugar from China, with over 80% of China's white sugar coming from Brazil. According to recent shipping reports, shipments from Brazilian ports to China in April were very limited, with only one ship in May and two ships in June. Therefore, the import volume of white sugar in the second quarter remained relatively low.
The import volume of substitute sugar has increased: Customs data shows that in April 2024, China's syrup import volume was 191,000 tons, a year-on-year increase of 6.56% and a month on month increase of 21.34%; From January to April 2024, a total of 516,700 tons of syrup were imported, a year-on-year increase of 5.51%, and the import volume increased for three consecutive months.
In early May, domestic sugar supply and demand both increased. Although the supply increased, downstream demand improved. Compared to the increase in sugar supply, the increase in sales data was more prominent, coupled with a reduction in import volume. Supporting the rise in sugar prices, in late May, as the sugar squeezing season fully ended and sugar entered a destocking cycle, industrial inventories increased year-on-year, and the import volume of substitute syrup increased. The substitution effect became apparent, and sugar prices weakened and fell
In the short term, the domestic sugar factory harvest season has completely ended. With the arrival of summer and the start of the peak consumption season, imported sugar will increase in the third quarter. However, with the promotion of domestic sugar destocking, although there is an expected increase in supply in the third quarter, the total amount is controllable, and the variable is still the impact of the phased concentration of imported sugar sources in Hong Kong on the domestic white sugar market. In the long run, the large influx of imported sugar and the listing of new sugar may loosen the supply and demand pattern of the domestic sugar market, and it is expected that sugar prices will maintain a downward trend.
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