| BEIJING, Apr 24, 2001 (AFX-Asia via COMTEX) -- The
government is considering releasing more sugar from state
reserves and increasing imports to curb sugar prices which
have risen 50 pct to 4,500 yuan a ton since the end of last
year, the China Daily Business Weekly reported, citing Jiao
Nianmin, secretary general of the China Sugar Association.
Prices have risen because of supply problems and natural
disasters have led to a fall in sugar output to around 6.2 mln
tons from 6.81 mln tons in the 1999-2000 season, Jiao said.
But market demand this year is expected to be 8.1 mln and
the situation is further exacerbated by manipulation by sugar
traders who have been stockpiling, expecting prices to rise.
The government has already released more than 1 mln tons of
sugar from state reserves since August last year and is
considering releasing more, Jiao said. China may also increase
sugar imports, but he declined to say by how much, the paper
reported.
Jiao warned that continuing high prices could threaten the
country's efforts to restructure the industry.
Some small unprofitable sugar firms, which have already
been shut down by the government, may be tempted to restart
operations and farmers may be tempted to plant more sugar cane
and beet instead.
He said this would ruin the government's strategy to cap
sugar production capacity and close down redundant facilities
to stem losses in the industry. Figures from the State
Economic and Trade Commission showed the industry had
accumulated losses of 10 bln yuan over the past four years,
the paper reported.
China shut down 149 sugar refineries last year and aims to
close another 134 this year in an attempt to improve revenues
and profitability. |