Xin Hua Wang·2025-08-12 05:48Core Viewpoint - The recent surge in domestic sugar prices has drawn market attention, with prices reaching historical highs due to supply-demand imbalances and other factors [1][2]. Price Trends - As of September 6, 2023, domestic sugar prices reached 7,390 CNY/ton, marking a 1.37% increase over two weeks and nearing the historical high of 7,830 CNY/ton set in August 2011 [1]. - The domestic sugar futures contract closed at 7,117 CNY/ton on September 6, with a 0.89% daily increase and a 4.37% rise over the past two weeks [2]. - International sugar prices also increased, with ICE raw sugar futures reaching 26.59 cents/pound, a 2.82% rise, and hitting a peak of 26.94 cents/pound, the highest since October 2011 [2]. Supply and Demand Factors - The increase in domestic sugar prices is primarily driven by a tightening supply due to a decrease in both production and imports. The total sugar production for the 2022-2023 season was 8.97 million tons, a 6.17% decrease year-on-year, largely due to reduced output in Guangxi, which accounts for 60% of the country's sugar production [2][3]. - Sugar imports fell to 2.98 million tons by the end of July 2023, a 23% decrease year-on-year, as rising international prices deterred import activity [3]. Market Outlook - Analysts expect domestic sugar prices to remain strong in the short term, supported by seasonal demand and low inventory levels. The upcoming new sugar season starting in October may initially maintain upward price pressure [4][5]. - The sugar industry is likely to continue benefiting from rising prices, with several listed companies reporting significant profit increases in the first half of 2023. Six out of eight companies related to sugar production and sales reported year-on-year profit growth [5]. Inventory and Production Insights - As of August 2023, the sugar production and sales rate in Guangxi was 90.15%, up 12.2 percentage points year-on-year, while industrial inventory dropped to 51.94 million tons, a decrease of 83 million tons [5]. - The current low inventory levels compared to historical averages suggest that sugar factories are under less pressure to sell, contributing to a strong price support mentality among producers [5].