China Sweetens Deal in Sugar Fight
The state-backed China Sugar Association has begun offering rewards as high as US$80,000 for information that “exposes criminal smuggling,” its latest effort to prevent smuggling in the world’s top sugar importer. From The Wall Street Journal:
The rewards signal Beijing’s determination to stamp out an illicit trade that threatens to undermine recently reintroduced price supports. China is a net sugar importer and the world’s top sugar importer, according to Chinese customs data, as growing affluence helps boost consumption.
The government reinstated a floor price for sugar of 6,550 yuan a ton in February after a two-year hiatus to protect farming incomes in China’s sugar country, mostly in the south. China’s floor price has helped buoy local prices, which were around 6,735 yuan a ton on Wednesday.
By comparison, import prices including taxes and freight were around 5,274 yuan a ton Wednesday, according to the Yunnan Sugar Network, an industry website. Global sugar prices have fallen to a 20-month low as an output surplus weighs on prices.
Chinese industry groups say that has led to a surge in illicit exports, particularly from Southeast Asia. The Guangdong Sugar Association last month estimated that sugar smuggled into China totaled about 500,000 tons in the first quarter, slightly more than the 499,254 tons imported legally according to government statistics.