Sugar refiners relief from output drop feared short-lived

PUBLISHED : Wednesday, 24 May, 2000, 12:00am
UPDATED : Wednesday, 24 May, 2000, 12:00am

A drop of more than 20 per cent in the output of sugar is bringing relief to the mainland's ailing sugar industry, pushing up prices and raising the hope that it could escape from the red this year.

Refined sugar output in the year to the end of last month was 6.64 million tonnes, of which 5.98 million was produced from cane and 665,500 produced from beet, a fall of two million tonnes from the previous year, the Economic Daily reported yesterday.

The fall was due to closure of small and inefficient sugar mills and growing less sugar cane on poor-quality land, which accounted for one million tonnes of the reduction.

The other one million tonnes was lost to an unusually severe frost which swept the southern regions in December.

As a result of this fall, prices have risen sharply, reaching 3,150 yuan (about HK$2,948) a tonne last month in Nanning, Guangxi province, the main cane-producing region, enabling many mills to turn a profit. But people in the industry do not know if such prices can be sustained into next year, with national stocks so high.

Because of low prices and oversupply, the sugar industry in Guangxi has been in the red for the past four years.

The regional government has been trying to close inefficient mills and encourage farmers to shift from cane to other crops.