China slaps heavy penalties on sugar imports

22.05.2017

China, the world’s biggest sugar importer, said on Monday it will impose hefty penalties on imports of the sweetener to protect its domestic producers, in the first ruling to come out of a months-long probe.

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China’s ministry of commerce said it will raise the duty on out-of-quota sugar imports for this fiscal year from 50 per cent to 95 per cent after its domestic industry was “seriously damaged” by a tide of imports since 2011.

The raised tariffs were widely expected after Beijing launched its probe into sugar imports last year. Those expectations were “one of the factors behind the rise in Chinese sugar prices at the end of 2016,” according to the US department of agriculture.

China bought about 3m tonnes of sugar from overseas last year, more than half of which came from Brazil. Under a WTO agreement 1.94m tonnes of those imports face a low tariff of 15 percent.

Sugar smuggling across China’s porous border with Southeast Asia is rife, estimated at more than a million tonnes annually, and some expect the raised tariffs to lead to more illegal imports as traders seek to avoid levies.

Minimum prices set by China’s sugar-producing regions inflated domestic prices and led to a strong flow of imports in recent years. Last year several of those provinces eliminated the minimum price policy, causing sugar cane producers to plant less but leaving Chinese mills struggling with high costs of production.

Sugar consumption has been rising steadily in China for decades due to rising incomes and urbanisation.


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