Chinese sugar mills have bought and are expected to buy more sugar from the world market as warmer temperatures spur demand for ice cream and soft drinks, traders said on Friday. Mills have bought more than 30,000 tonnes of raw sugar from Australia and some thousand tonnes of refined sugar from South Korea in the expectation that domestic prices will rise in July and August, traders said.
Although the price of imported sugar is still above that of domestic sugar, traders expect sugar prices to be lifted in the coming two months by strong demand from drink makers and ice cream manufacturers as the summer gets underway.
"Even though by current calculations they will lose money (on imports), they will continue to buy because some are looking at good prices in the future," said one trader at COFCO. "You will see small volumes of imports from now on," he said. Refined sugar was priced at 3,440 yuan ($415.70) a tonne in consuming areas, up 6 percent from last month, while in consuming areas sugar fetches 3,210 yuan per tonne, a rise of 6.0 percent, according to the Guangxi Sugar Exchange on Thursday.
Price is forecast to rise to between 3,350 yuan and 3,700 yuan per tonne in July, said another trader. Sugar mills are using the 600,000 tonnes in quotas allocated for private firms for their imports.