Sweeteners China News 1705

Date: May 27, 2017
Pages: 26
Price:
US$ 2,700.00 (The price excludes 8% VAT)
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Publisher: Guangzhou CCM Information Science & Technology Co., Ltd. (CCM)
Report type: Strategic Report
Delivery: E-mail Delivery (PDF)
ID: S473E9780AAEN
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Sweeteners China News 1705
Welcome to the May Issue of Sweeteners China News.

This newsletter will help you stay ahead of the game in this fast-changing market with real-time reporting on the entire sweeteners industry chain, from raw materials to end consumption. It includes breaking news from China and abroad, the latest market data (price, import & export, production, consumption, operating rates, etc.), in-depth analysis of market trends, Chinese government policy, performance of Chinese producers, M&A, new technology, and expert commentary from industry insiders.

Here is the Editor's Note for you to know about the May issue specifically:

China Sugar Summit Forum & China Sugar Association Commercial Member Symposium held at the end of April 2017 noted that sugar price stabilisation is a key task in the 201 6/1 7 extracting season (Oct.2016–Sept.2017). Jia Zhiren, director-general of China Sugar Association, pointed out that China's total sugar production in 2016/17 was predicted to be only 9.20 million tonnes, much lower than the previously estimated figure (10 million tonnes). But the sugar consumption in this extracting season would approximate to the figure in the previous one (15.20 million tonnes), so the sugar supply shortage (=output-consumption) will further grow.

As the Ministry of Commerce (MOC) imposes extra duties on out-of-quota imported sugar, China's sugar import volume will decrease YoY. On 22 May, 2017, the MOC announced to impose extra duties on out-of-quota imported sugar from 22 May, 2017 to 21 May, 2020. The extra tariffs will be reduced annually during the three-year period. Specifically, the extra duty rate will be set at 45% from May 22, 201 7 to May 21 , 201 8, and be reduced to 40% then 35% in each subsequent year.

China's sugar supply shortage will be greater than the prediction because the sugar production and import volume are lower than previous estimates, thus boosting China's sugar price. Under the circumstance that the international sugar price is much lower than the domestic one, sugar smuggling into China will be increasingly frequent. In 2017, crackdowns on sugar smuggling will be more severe. According to the Opinions of the State Council on the State Control of Sugar Industry in 2017, for instance, China will continuously crack down sugar smuggling and promote the application of two dimensional anti-counterfeiting codes. On 1 8 May, 2017, the Legislative Affair Office of the State Council announced to solicit public opinion on the Provisions of Anti-smuggling (Exposure Draft) and inflict heavier punishment on smuggling.

Sweeteners China News is a monthly published newsletter, which can be downloaded in PDF format. The subscription mode for this newsletter is yearly and the subscriber will receive 12 issues per year.

HEADLINE

On 26 April, 2017, the MOC published the results of an investigation into imports of sugar, illustrating that increases in sugar import volume have harmed China's sugar industry. The imposition of extra tariffs on out-of-quota imported sugar and possible trade remedies will boost the domestic price of sugar in the 2016/17 extracting season.

China (Kunming) Sugar Industry Forum & China Sugar Association Commercial Member Symposium held on 28–29 April, 2017 revealed that measures would be taken to safeguard the interests of sugarcane growers and sugar enterprises in the 2016/17 extracting season. Although sugar production has increased in major sugar producing areas of China (except Yunnan Province), the sugar production costs in these areas are fairly high, due to the poor conditions for production, low level of mechanisation, deterioration of seed quality, a small number of improve varieties and other problems.

According to their financial figures for Q1 2017, three large Chinese sugar enterprises turned losses into gains in this period, thanks to YoY increases in the sales volume and price of sugar. In the 2016/17 extracting season when price stabilisation is the goal for China's sugar industry and the sugar production is predicted to be below a previous estimate, the domestic sugar supply shortage will be exacerbated. Therefore, China's sugar price will remain high, consequently improving sugar enterprises' financial performance for 2017.

Guangdong L&P's acquisition of Nantong Changhai on 8 May, 2017 brought great changes to the sucralose industry. The sucralose price soared, because the Tate Lyle moved its sucralose factory and China's environmental inspections became increasingly rigorous. Considering that the sucralose production costs are nearly half of its price, sucralose manufacturers will inevitably carry out a price war in the sucralose market to occupy more market share. It is predicted that the sucralose price will fall in H2 2017.

On 27 April, 2017, Guilin Layn released its 201 6 financial report and declared a YoY decrease in net profit in 201 6 induced by a 39.56% YoY increase in operating costs. Considering the exciting market prospects of plant extracts, in 201 7 Guilin Layn will continue expanding the market of natural sweeteners like Luo Han Guo extract and stevia extract as well as tap into the end market of plants extracts.

On 28 April, 2017, Baolingbao released its 2016 financial report and ascribed its improvement in business performance to growth in three major business segments: the functional ingredient segment, intermediate product segment and consumer product segment. Considering that the big health industry has great potential for growth, Baolingbao will persist with its big health strategy.

On 8 May, 2017, COFCO Sugar signed a strategic cooperation agreement with Shandong Xingguang, with an aim to make full use of COFCO Sugar's ability in doing sugar business as well as Shandong Xingguan's sugar production capacity. This cooperation will not greatly boost COFCO sugar's financial performance in 2017, but could increase its sugar capacity to some extent, CCM believes.

On 28 April, 2017, Shandong Longlive revealed in a reply to SZSE's enquiry that the acquisition of Xiamen Kuaiyun and Zhaorong Union could not only enhance its marketing of new healthcare products and services but also create new profit growth points for it.

From Jan. to April in 2017, China's ex-works price of HFCS rose slightly, showing an uptrend contrary to the HFCS price cut in 2016. The unexpected increase during this period is ascribed to the price rises of raw materials as well as the reduced production of HFCS. CCM predicts that the HFCS price will climb continuously after May, because of a peak season for the HFCS market and HFCS production reduction caused by more rigorous environmental inspections.

China's sorbitol export volume rose YoY in Q1 2017, mainly due to a dwindling demand for sorbitol at home but a burgeoning demand abroad. That the tax rebate rate for sorbitol export grew to 1 3% also contributed to this increase. It is expected that the domestic demand for sorbitol will just rise slightly in late 201 7, but the overseas demand will continuously climb. Thus, the domestic sorbitol manufacturers will increase the exports of sorbitol.
Headline
Editor's Note
Column 1 Governmental Direction
Results of MOC's investigation into imported sugar to influence domestic sugar price in 2016/17 extracting season
China Sugar Industry Forum emphasises sugar price stabilisation in 2016/17 extracting season
Column 2 Market Dynamics
Three Chinese large sugar enterprises turn losses into gains in Q1 2017
China's sucralose price will decline in H2 2017
Column 3 Company Development
Guilin Layn suffers YoY decrease in net profit in 2016
2016 sees steady growth in Baolingbao's financial performance
COFCO Sugar signs strategic cooperation agreement with Shandong Xingguang
Reasons for Shandong Longlive's acquisition of two Internet companies
Column 4 Price Update
Ex-works prices of sweeteners in China, May 2017
China's HFCS price rises in first four months of 2017
Column 5 Import and Export Analysis
Exports of sweeteners and raw materials from China, March 2017
China's sorbitol export volume grows YoY in Q1 2017
Column 6 News in Brief
Jiangsu Shuangchang's 6,000 t/a acesulfame-K project approved
Shandong Longlive put biobased graphene production line into pilot production
Nanning Sugar's non-public offering of shares application rejected
Legislative Affair Office of State Council solicits public opinion on Provisions of Anti-smuggling (Exposure Draft)
MOC imposes extra duties on out-of-quota imported sugar
Q1 2017 sees significant YoY increase in LMZ's sucralose price
Anhui Jinhe plans to build pyridinium salt project
Japan changes name of Chinese food enterprise in cyclamate detection list
QHT suffers YoY decrease in net profit in Q1 2017
China's sugar import volume in April 201 7 down by 40,000 tonnes YoY

COMPANIES MENTIONED

COFCO Tunhe Sugar Co., Ltd.; Nanning Sugar Manufacturing Co., Ltd.; Guangxi Guitang (Group) Co., Ltd.; Guilin Layn Natural Ingredients Corp.; Baolingbao Biology Co., Ltd.;
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