China's sugar futures limit up on talk of state purchase

Talk that China may soon buy another 500,000 tonnes of sugar drove sugar futures limit up on the Zhengzhou Commodity Exchange in the country's central region, traders said on Wednesday. Zhengzhou white sugar futures hit the 4 percent limit up soon after the start of the afternoon session, to stand at 5,573 yuan per tonne.
In February China announced plans to stockpile 1 million tonnes of white sugar from the domestic market for state reserves in 2011/2012, and it bought an initial 500,000 tonnes at 6,550 yuan ($1,000) per tonne by the end of May. "There is talk in the market that the government may continue to buy another 500,000 tonnes of sugar from the market, pushing up prices," said Zhu Xiaoyan, an analyst with Tianma Futures. Traders said the National Development and Reform Commission met on Wednesday to discuss the purchase of farm products.