Sugar output in China's top two growing regions is expected to decline after summer drought conditions hurt sugarcane production, dealers said, adding to pressures pushing sugar futures prices limit-up on Thursday. Traders told Reuters they estimated sugar output in the southern Guangxi region, the largest sugar producing area, would fall by about 300,000 tonnes from last year's 7.63 million tonnes.
Guangxi produces 60 percent of China's sugar output, which totalled 12.43 million tonnes last year. The estimated output for Guangxi was lower than earlier forecasts of 7.7 million tonnes made by the China Sugar Association last month. The association has not revised its figure this month.
Sugar output in Yunnan, the country's second largest sugar area, was likely to fall below 2 million tonnes, said Jiang Dazhong, an analyst with Liangyun Futures. The province produced 2.23 million tonnes last year. Expectations of lower output, coupled with Beijing's failure to release government sugar reserves, drove up Zhengzhou sugar futures prices nearly 4 percent, its daily trading limit, on Thursday.