China, the world’s second-biggest sugar consumer, bought 250,000 metric tons as a 23 percent decline in prices in the past year made imports attractive, said two executives with direct knowledge of the matter.
The raw-sugar cargoes will arrive in January and February at about $460 a ton, cost-and-freight to China, said the executives, who asked not to be identified because the information is private. At least one shipment is sourced from Guatemala, they said.
China’s purchases may help curb a second year of global surplus and the slide in New York futures. Goldman Sachs Group Inc. cut its price forecast this week to 18.5 cents a pound in three and six months from an earlier estimate of 22 cents, citing rising inventories.
“The purchase by the Chinese may provide some support to global sugar prices as it signals that when prices fall to certain levels buyers such as China and India may be ready to step in and make purchases,” Dong Shuangwei, an analyst at Capital Futures Co., said by phone from Beijing today.
Raw sugar for March delivery climbed 0.7 percent to 18.52 cents a pound on ICE Futures U.S at 5:17 p.m. Singapore time. White sugar for delivery in May gained 0.3 percent to close at 5,527 yuan ($889) a ton on the Zhengzhou Commodity Exchange today. The most-active contract in Zhengzhou has declined 14 percent in the past year as farmers boosted planting.
China usually issues an annual import quota for 1.94 million tons under a framework with the World Trade Organization at the start of the calendar year. So far, the government hasn’t handed out the quota for this year. Imports outside the quota pay a duty of 50 percent.