March 10, 2015 / 6:07 AM / 4 years ago

China should control sugar imports, says Bright executive

BEIJING, March 10 (Reuters) - China needs to introduce measures to strictly control sugar imports, with low tariffs and cheap overseas shipments damaging the local industry, an executive at a large Chinese sugar processor said.

China’s sugar mills, caught between state-set prices for sugar cane to support farmers and cheap imports of raw product, lost a combined 9.8 billion yuan ($1.56 billion) in 2014, said Ge Junjie, vice president of state-owned Bright Food Group Co.

“Global sugar imports have already damaged China’s sugar industry. I believe there needs to be measures to strictly control imports,” he told Reuters, without directly calling for a raising of the tariff.

China imported 3.49 million tonnes of sugar in 2014, with the first 1.94 million tonnes at a tariff rate of 15 percent as part of the country’s commitments to the World Trade Organisation.

The tariff for non-quota imports is 50 percent, but this was below the global average for sugar tariffs of 97 percent, he said.

Ge, who is a delegate to the National People’s Congress, the government’s legislative arm currently meeting for its annual parliament session, said an automatic import licensing system recently introduced by the Ministry of Commerce would help to control imports.

He also called for an investigation of trade remedies. China’s sugar sector has previously lobbied for an anti-dumping investigation into imports but the government has not yet taken any action to support the demand.

Shanghai-based Bright, one of China’s biggest food companies with a focus on dairy, confectionery and wine, has a sugar processing capacity of 1.5 million tonnes and boosted its share of the domestic milling sector with a purchase of a Guangxi mill last year.

China was the world’s top sugar importer in 2013, but imports fell 23 percent last year after a fall in local prices boosted demand for homegrown sugar.

Ge also called for further support for cane growers, including more subsidies.

Chinese farmers produce 4 tonnes of cane per mu (equal to 1/15th of a hectare) compared with 10 tonnes in Brazil, according to Bright data.

Ge said China’s sugar consumption will reach about 14 million tonnes this year, and said Bright plans to use its presence in China’s top cane growing regions, Guangxi and Yunnan, to build a national distribution network.

$1 = 6.2628 Chinese yuan renminbi Reporting By Dominique Patton; Editing by Richard Pullin

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