China to buy more sugar, but not from Cuba

China will take advantage of easing sugar prices to buy up to 1.8 million tons of sugar over the next three or four months, Reuters informed, citing an ANZ Bank report.

Although China is its largest sugar buyer, Cuba probably won’t be able to sell more than contracted amounts to China. While the Cuban sugar industry’s productivity is slowly rising, the total yield of the current harvest will continue to hover around the record-low of 2 million tons last year. Meanwhile, Brazil is expected to increase its sugar exports this year.

Prices of domestically produced sugar in China have surged to record levels of around 50 cents per pound in recent months, while imported sugar from Brazil has slipped to near 25 cents. Due to the price disparity, China imported a record 1.766 million tons last year, 62 percent of which came from Brazil, according to Reuters. With an expected 15.5 million tons needed, China expects a deficit of around 2 million tons this year. If sugar prices drop to 20 cents, China would not only cover its deficit but also replenish its sugar reserves, an official told Reuters.

source: cubastandard