"Syrup" should also be "imported on demand", from sugar management

In the first half of the 2019/20 crushing season, the roller coaster market of the sugar market once again interpreted the "two days of ice and fire". Since February, due to the double impact of the new crown epidemic and the sharp decline in crude oil prices, the international and domestic sugar industry bull market dreams have been shattered, and prices have returned to lows. The game between low sugar prices and low oil prices has a sustained and dynamic impact on the future development of the global sugar industry, which has increased the originally clear fundamental variables, and the development of the domestic sugar industry is once again facing severe challenges.

In recent years, a series of measures such as sugar trade relief policies, continuous high-pressure and strict crackdown on smuggling, and self-discipline management of imported sugar have been like a protective embankment, which has won valuable time and space for the upgrading and transformation of China's sugar industry. However, since the second half of last year, the import volume of "liquid sugar" (that is, "syrup") has been increasing, forcing this protective embankment to open a dangerous floodgate, which is likely to lead to the disappearance of the excellent situation that all parties in the industry have tried to maintain.

According to the relevant customs regulations, all sugar products imported under commodity code 17019000 are all applicable to the tariff policy of China's sugar imports, while sugar semi-finished products and associated products under this item can enjoy low tariff or even duty-free import policies according to the tax code or trade agreement to which the goods belong. The imported commodity "syrup" belongs to 17,029,000 and can enjoy zero tariff or 8% MFN low tariff policy, and the import cost is extremely low, resulting in an increasing import volume, which has a great negative impact on domestic sugar prices and sugar consumption.

At present, China is in a critical period of transformation and development of the sugar industry. However, under the general trend that the global economic downturn has led to shrinking consumption, the total international sugar production is easy to increase and difficult to decrease, and the price of raw sugar may be at a relatively low level for a long time, the domestic sugar industry is under pressure again, and the import advantage of "syrup" is constantly expanding. The data shows that since April last year, China's syrup imports have gradually shown a rapid increase trend. Customs data show that China imported 92,000 tons of syrup in March this year, it is reported that 120,000 tons of syrup was imported in April, and in the 2019/20 crushing season, the total amount of imported syrup has reached 383,000 tons as of April 29. According to the sugar content of syrup 0.75, the increase in syrup imports to replace domestic sugar consumption has reached 289,000 tons. If syrup imports are not effectively curbed, the increase in syrup imports throughout the crushing season to replace domestic sugar demand will be as high as 400,000 tons, and will continue to maintain an upward trend in the future. (The data quotes the article "The surge in syrup imports has changed the domestic sugar supply and demand structure and the industry still needs policy care")

Therefore, the whole sugar industry in China must have enough attention and clear understanding. The following are some of the views of representatives of all parties in the sugar industry on the harm of "syrup", from these views, it can be found that China's sugar industry urgently hopes that the state can effectively control the import of "syrup", and the import and use of "syrup" will be included in the overall planning of China's sugar "total balance" as soon as possible.

Processing sugar enterprises: "Self-discipline" is the common responsibility of people in the whole industry

Judging from the sugar prices over the years, the international sugar price has been lower than the domestic sugar price for a long time, the time above the domestic sugar price is short, and the import profit has existed for a long time. China's self-produced sugar can not meet its own needs, imported sugar has become an indispensable supplement to the domestic sugar supply. However, a large number of disorderly imported sugars have learned lessons about the harm to the domestic sugar industry, so the self-discipline management and orderly and controllable imports of processing sugar enterprises are necessary conditions for the healthy and stable development of the domestic sugar industry, which is also the corporate responsibility and industry responsibility of processing sugar enterprises. However, the impact and harm caused to the sugar industry by the uncontrolled import of "syrup" is faster and more obvious, one is that there is no processing period at all, and the import can be used; the other is that there is no processing link, the cost is lower, the contribution to the country and the industry is less, at least there is no new employment and tax opportunities. Therefore, it is necessary to control the import of "syrup" as soon as possible to avoid further increased harm to the industry.

Sugar enterprises: The "cost reduction and efficiency increase" at the production end is the guarantee for the sustainable development of the industry

Due to various reasons such as land resources, production technology, labor costs, etc., domestic sugar production costs have always been higher than those of major international sugar producing countries, basically have no international competitiveness, and are very vulnerable to the impact of imported sugar, especially smuggled sugar, while the import cost of syrup is lower. It is understood that the average price of "syrup" imported from Thailand in 2019 is 0.36 US dollars / kg, and the average price imported from Malaysia is 0.41 US dollars / kg, which can enjoy zero tariff or 8% tariff on most MFN imports, and the VALUE-added tax rate is consistent with white sugar. What is even more frightening is that "syrup" is not an imported self-regulatory commodity, and the amount and time of its import cannot be predicted and managed. Once a large number of disorderly imports, sugar enterprises use cheap "syrup" products, that is equivalent to the country's door is wide open, countless imported sugar in the form of liquid into the domestic market, the country has invested a lot of money and energy for many years to optimize the industrial layout, promote good seeds and good methods, and strive to carry out technological innovation to achieve "cost reduction and efficiency" Measures will be difficult to be effective, "domestic production, import as a supplement" sugar self-sufficiency strategy has become an empty phrase.

Sugar enterprises: In the long run, the low cost of "syrup" is only a moon in the mirror

The biggest advantage of "syrup" is that it is cost-effective, the disadvantages are also obvious, the retention period of "syrup" is very short, generally in 1-2 months, it is more difficult to preserve in the summer due to high temperature, and it is not suitable for enterprises that need a large amount of stockpiling and a long inventory cycle. From the current point of view, sugar companies use only a small part of the amount of "syrup", and most companies do not even know that there is this product. The use of "syrup" to replace white sugar, although the short-term effect on the cost reduction of enterprises is obvious, from a long-term point of view, it is equivalent to a large number of low-cost imported sugar with unstable shelf life in use, one is that it may lead to the loss of stock accessories, and the other is to shrink the amount of domestic sugar, which will eventually lead to the actual cost of sugar being decided by international sugar, and the development of enterprises in the future will be more passive.

Sugar market analysts: "Syrup" imports forced a revaluation of the balance sheet of the crushing season

In the first two crushing seasons, benefiting from the favorable support of the controllable total amount of imported sugar and the sharp reduction of smuggled sugar, the domestic supply situation improved rapidly and sugar prices returned to rise. This year, the amount of domestic sugar and imports are also basically clear, and the supply side is clear. However, due to the impact of the epidemic, whether consumption can reach the expected 14.5 million tons at the beginning of the crushing season is not yet known, and some institutions have lowered their consumption estimates by 50-1 million tons. If the import volume of "syrup" cannot be controlled, the substitution of white sugar consumption in this crushing season will reach about 400,000 tons, and the supply and demand table of the crushing season will be changed from basic balance to excess. Of course, whether there is really a surplus, the more critical factor is whether consumption can be started and increased in the later stage.

Circulation enterprises: The large-scale sale and use of "syrup" will destroy the foundation of the sugar industry

For middlemen and circulation enterprises, the sale of white sugar bears various risks such as price, in-transit, inventory, account period, etc., and may not be able to make money. The "syrup" price is low, easy to sell and easy to get profits, why not enjoy it for enterprises. However, once the downstream enterprises use a large number of "syrup", the circulation enterprises sell a large number of "syrup", and the upstream sugar enterprises can only make a comprehensive loss. Loss-making sugar enterprises can not increase investment in planting, production and other links to improve industrial efficiency and reduce production costs, industrial development will fall into a vicious circle, long-term will destroy the foundation of the development of the sugar industry. Therefore, although the import, sale and use of "syrup" is a legal act, it is contrary to the overall interests of the sugar industry and is not conducive to the sustainable development of the sugar industry, although legal but unreasonable, it should be controlled and integrated with the overall interests of the sugar industry, becoming a reasonable and legal behavior.

Sugar Industry Association: "Total balance", from sugar management is the fundamental solution to the import of "syrup"

Sugar is an important product related to the national economy and people's livelihood, China's sugar industry bears extensive social responsibility, is an important starting point for poverty alleviation and rural revitalization strategy implementation. In the first ten crushing seasons, China's sugar production is insufficient, but in such a supply and demand situation, China's sugar industry is still in trouble, which shows that the "total balance" is very important. Therefore, it is recommended that domestic sugar, imported sugar (raw sugar, finished sugar, ready-mixed powder, syrup or sugar water and other forms of sugar products), and the possible reserve stock of the state be included in the total amount of supply that can be supplied in the principle of balance between supply and demand, and implement the import of demand. Moreover, all sugar and sugar semi-finished products and associated products should be strictly managed from sugar, and the relevant taxes and fees should be increased uniformly in accordance with the tax code of 1791000.

Under the extensive requirements of all parties in China's sugar industry, the China Sugar Industry Association, Guangxi and other provinces (autonomous regions) and municipal sugar associations have submitted suggestions and reports to the relevant state departments, imploring the state to pay attention to the impact and impact of "syrup" imports on the domestic sugar industry, formulate control measures for the import of "syrup" as soon as possible, bring "syrup" imports into the scope of total balance management, and carry out sugar management and sugar taxation for "syrup" products according to the isometric sugar rate, so as to maintain the hard-won healthy and stable development of China's sugar industry.

Source: MuTian Technology; Author: XXX; Agricultural Futures Network reprinted this article only for the purpose of disseminating more information, does not mean that this network endorses the author's views in the article. If the author of the reprinted article thinks that there is something wrong with this website, please call this website at 010-51289506, and this website will immediately consult with you and solve relevant matters.

(Editor-in-Charge: Shi Dengfeng)