Taiwan sugar imports fall on prices

Taiwan's sugar imports fell almost 20 percent in the five months to May 2006 as overbuying last year, soaring international prices and replacement by fructose hit demand.
An 8 percent rise in total imports last year, with a more-than four-fold spike in December, swelled domestic stocks, which together with higher global prices has squeezed private importers in the newly liberalised market.
Fructose, a competitively priced sweetener made mostly from corn starch, has made up for the drop-off. "Demand for fructose is rising and I would estimate that it could increase by around 30,000 to 40,000 tonnes to around 200,000 tonnes this year," Tony Chen, an international trade manager at Vedan Enterprise Corp, one of the island's major private sugar importers. Lower pricing by the state-run Taiwan Sugar Company, the island's only refiner, has trimmed profitability of private importers, contributing to a cutback in imports, traders say.
Imports of sugar fell to 232,000 tonnes in the January to May period from 285,600 at the same time last year, according to the latest customs data.
Vedan's Chen said annual demand for fructose was roughly 150,000 tonnes, but that the island was expected to see demand rising 10 to 20 percent this year, and perhaps as high as 200,000 tonnes.
International sugar prices have fallen from record highs last month, weighed down by an expected surplus in top producer Brazil. Benchmark London October white sugar futures hit an all-time high of $498.90 per tonne in early July, but have since dipped to around $426. However, another trader said room for fructose replacement was limited because once sugar prices dropped, the appeal of the sweetener declined.
"Sugar prices have already dropped, which erodes the price difference between fructose and sugar," said an industry official, who declined to be identified.
"High prices are the major reason for the import slowdown." Slack demand on the island has prompted both Taisugar and private importers to seek sales abroad, with Taiwan-based Accord Tex Industrial Co Ltd lodging a bid to sell 12,500 tonnes of white sugar to Bangladesh in a tender last month.