Sugar in China 2008: A Market Analaysis
The retail market for sugar in China has grown by over 130% since 2001 to RMB7.66bn in 2007.
Despite price fluctuations due to the effects of altering world sugar prices and local shortages the demand for sugar by Chinese consumers is steadily growing.
Growth is being stimulated by growing use of sugar as an ingredient in food and beverage products as well as an additive to foods and drinks.
In general cane sugar refineries are performing better than beet sugar refineries, many of which are currently recording losses.
However, the government is seeking to control production and imports of sugar to maintain prices. Low prices have caused sporadic trouble between the government and sugar growers over recent years. While retail prices have continued to rise, wholesale prices have fluctuated due to local supply inconsistencies, often intervened in by the government using state-owned sugar stocks.
The market is also threatened by the rise in prominence of alternative sweeteners such as artificial sweeteners and molasses.
Sugar is obviously a major crop for China, both as a result of increasing retail consumption and the switch to high quality products, but also through the much larger food and beverages sector consumption.
China grows both beet and cane sugar. Sugar cane is really a form of perennial grass, which is replanted every few years and contains approximately 10% sugar. Sugar beet is an annual crop with around 15% sugar content. As well as sugar for ingredients and personal consumption it is also used for ethanol (an automobile fuel) and other by-products including animal feed and paper.
The total consumer market for sugar in China (including food and beverage processing) has grown by 44% since 2001 to RMB50bn (US$6.6bn) in 2007.
The arrival of the fast-food chains, western-style supermarkets, greater awareness of convenience foods and the emergence of a generation both willing and able to try new products has meant that the market for sugar in China has grown strongly.
Despite price fluctuations due to the effects of altering world sugar prices and local shortages the demand for sugar by Chinese consumers is steadily growing. Growth is being stimulated by growing use of sugar as an ingredient in food and beverage products as well as an additive to foods and drinks.
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