China, one of the world's top sugar consumers, expects output to grow more than 7.0 percent to 9.8 - 10 million tonnes in the year through September 2006, government officials said on Tuesday.
The increase will come mainly from the top sugar region of Guangxi, which produces about 60 percent of China's total output. Domestic sugar mills began crushing in October.
China would likely allow the import of about 500,000 tonnes in 2006 under the lower tariff import quotas as it did for this year to cover the deficit, Sao Lieu, a division chief at the powerful National Development and Reform Commission, told an industry meeting in the city of Nanning.
Her speech was posted on the Guangxi sugar exchange Web site at www.gsec.com.cn. She calculated the deficit based on the demand of 10.5 million tonnes for the current year, same as the previous year.
Guangxi is expected to produce 5.8-6.0 million tonnes in the year, a rise of 5-10 percent from the previous year, she said. The current drought in Guangxi posed no thread to sugar production because most crops were already matured for crushing, local agricultural officials said.
"The drought is not as serious as last year and we see minor losses," a local agricultural official told Reuters. Severe drought last year led to a fall of 9.6 percent in Guangxi output to 5.3 million tonnes.
Sao also said Chinese food producers used more artificial sweeteners, reducing sugar demand by 3.0 percent. Sugar prices fell about 5.0 percent on Tuesday from a month as supplies increased.
Prices for refined sugar in Guangxi were quoted at between 3,600 yuan ($446.3) and 3,700 yuan per tonne and at between 3,750 and 3,830 yuan per tonne in consuming areas, according to the Guangxi exchange.