In an announcement made by the Huashang Reserve Commodity Management Center on Friday, China is set to auction off 126,700 metric tons of sugar from its state reserves on September 27.
The auction will consist of 26,700 tons of old crop white sugar, with a minimum price set at 6,500 yuan ($890.40) per ton, as well as 100,000 tons of white sugar produced in 2023, with a floor price of 7,300 yuan per ton, as indicated in the notice.
This move is aimed at ensuring the stability of the domestic sugar supply and prices, according to the official notice. Global sugar prices have reached a 12-year high this year, leading to reduced Chinese imports, coupled with a decline in domestic sugar production.
It’s worth noting that the auction volume falls short of analysts’ expectations, which had ranged from 300,000 to 500,000 metric tons. It remains uncertain whether China will conduct additional auctions in the future.
China heavily relies on sugar imports, primarily from Brazil, to meet its annual demand of approximately 15 million tonnes.