MECAS(20)08 - Sugar Market Development in China

China is one of the largest economies in the world, second only to the US, with exponential growth over the past few decades, its annual GDP growth rate between 2008 and 2018 averaged 8.1%. Although, the pace of growth has slowed in recent years, it remains on a high level compared to many other developing countries in the world. China’s economy has experienced a number of structural changes during recent years which have also had an impact on the food and agricultural sector. The decline of the working age population in rural areas, which started in 2015, together with increasing real wages requires a different approach when it comes to rural labour. China, in its drive towards self-sufficiency has achieved remarkable results in the expansion of agricultural production. But some of this increase has been at the expense of the sustainable use of the country’s natural resources. Agriculture is the biggest user of natural resources such as land and water. These factors could affect the further growth and development of the agricultural sector. New policies, including new qualitative approaches, such as mechanisation, fertilisation of exhausted arable lands and innovations in agriculture could be a positive driver for future development.

Globally, China is a substantial growth market, including its domestic sugar market. Domestic production, consumption, imports and policy dynamics are all key to the outlook for the Chinese sugar balance. This study aims to uncover China’s importance in the world sugar economy and explore the latest developments in the industry in order to make forward projections of the country’s sugar balance.

In 2018, China cemented its position as the world’s largest sugar net-importer, being the largest importer with total purchases of 5.2 mln tonnes of sugar from the world market. Although per capita consumption remains low, at 11.3 kg in 2018, as against a world average of 22.6 kg, China’s sugar consumption demonstrated sustainable growth during ten consecutive years, from 2008 to 2018, averaging 2% annually. Declining production during the same ten years period by 2% annually was offset by higher imports with a growth rate (2008-2018) averaging 26% annually. In 2020, the new uncertainty owing to the Covid-19 pandemic has impacted global market developments in different areas, as separate reports have shown.

This study will present a general overview of China’s sugar market, with an update on the recent market situation, the country’s policy on sugar production and governmental support of the sugar industry, to demonstrate its importance in the world sugar economy, and show principal changes of its position on the world sugar map. A major aspect of the study will consist of the latest update on China’s position in the global sugar market, an assessment of the recent policy trends with regards to domestic sugar production, the dynamics of sugar consumption, including recent trends and prospects in the use of caloric and non-caloric sweeteners, development in sugar trade, and finally, discover the main country’s policy changes in terms of sugar market support.



I.	China: Updates on Country’s Position in the World Sugar Market

II.	Sugar Production 
        A.	   General Overview
        B.	   Sugar Cane and Beet Cultivation
        C.	   Processing Sector
        D.	   Sugar Production Outlook 

III.	Sugar Demand 
        A.	Sugar Consumption
        B.	Starch Sweeteners (Starch Sugars) 
        C.	High Intensity Sweeteners
        D.	Sugar Consumption Outlook 

IV.	Foreign Trade in Sugar
       A.	  Recent History and Trends
       B.	  Imports versus Stocks

V.	China Sugar Policy 
        A.	Regulated Prices
        B.	Import Duties and Tariff Rate Quota
        C.	Additional Measures (Safeguard Measures)
        D.	The 13th Five-year Plan for the Sugar    Industry
        E.	China’s Foreign Agriculture Investments

Conclusions – Future Prospects 
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