National Reserve Shall Reduce Sugar Price Falling

By CnAgri2013-01-05 11:12:42 Print     Procurement for the national reserve shall reduce the falling rate of sugar price in the near future.
 
    Authorized by the State Council, the Government decided to procure 3 million tons of sugar for its interim reserve in the year in order to stabilize the price. Based on the principle that the procurement shall be carried out in batches, the first batch shall see procurement of 1.5 million tons. The basic price is 6100 yuan (railway station price in Nanning, including tax), adding the miscellaneous cost to the depots that look after the reserve, then there is the ceiling settlement price for depot delivery. The trading date shall be 27^th December 2012 and the trading amount shall be 800,000 tons; another trading date shall be 22^nd January 2013 and the amount shall be 700,000 tons.
 
    This policy shall reduce the price shrinkage in the near future. Although there is strong forecast for more sugar production in the campaign, yet the specific data waits to be further assessed alongside the progress of the campaign. There is still uncertainty in the near future. Also, there shall be speculation on frost after entering into January, hence there is less pressure for price slip in the near future.
 
    Although 1.5 million tons procurement shall be made for the first batch, yet the Government did not announce the amount for rotation. Even if there is no announcement, rotation shall be carried on. It was reported the Government rotates 600,000 tons at present, so the net procurement should be 900,000 tons. In addition, the Government announced 3 million tons procurement in total, so the second batch shall see 1.5 million tons procurement, yet the second batch is still a question. This doubt would support the price for some time. Whether there shall be a second batch procurement will depend on the domestic sugar production and consumption status.
 
    The current price reflects the Government’s procurement policy. We deem the May contract price shall fluctuate between 5300-5800 yuan/ton in the near future.

From “China Sugar Market Monthly Report”