A report from an annual Sugar Industry Economic Development Forum held in Kunming China at the end of April, 2016 has revealed that China’s sugar crop area is expected to recover in the 2016/17 season.
China’s largest sugar cane producing province Guangxi has its cultivation area likely to increase by 10% while China’s smallest province Hainan is assumed to increase by 20%. Inner Mongolia’s Beet sugar output is also expected to reach a high record of 350,000 tonnes next season, up from 274,000 tonnes in the 2015/16 season.
Interestingly, last 2015/16 season saw Guangxi’s average cane yield improve to 52.17 tonnes per hectare from 48.61 a year earlier. During the same season, Guangxi’s sugar cane price increased to CNY440 per tonne from CNY400 last year. Consequently, the high yield and high prices gave farmers the opportunity to earn CNY2382.98 per mu of cane this season, up 20.07% from CNY1,988.99 last year.
However, despite the situation slightly improving in China’s sugar growing farmers, problems of smuggled sugar continue to prevail and affect Yunan’s local industry. In addition, China will only experience a modest growth of not more that 10% due to its average national sugar price of about CNY5,400 per tonne (USD$ 823) maintaining its position below the average cost of production of CNY5,800.
Rising labour and land costs in the 2015/16 season with slightly declining seed and fertilizer prices resulted in costs increasing by 5.24 to CNY2,122.29 per mu from CNY2,016.62. As a result, this season’s net profit per mu of cane reached CNY260.69 as compared with a CNY27.63 loss a year ago. It is not surprising that Guangxi farmers are reported to be quickly switching to a high yielding cane variety.
Source: MITC, 26th May, 2016