Report Summary 1. Report Industry Investment Rating No information provided. 2. Core Viewpoints - The import supply pressure of sugar may increase in the second half of the year. If the external market price does not rebound significantly, the Zhengzhou sugar price is likely to continue to decline. [2][4] - The current domestic sugar price spread structure is contradictory. The 9 - 1 spread of Zhengzhou sugar has a positive spread, while the 7 - 9 spread has a reverse spread, which is contrary to the theoretical situation. [15] 3. Summary by Related Catalogs 3.1 Import Supply Pressure - Since mid - May, the international sugar price has continued to decline. The price of ICE raw sugar October contract has weakened from over 18 cents per pound, and the July contract once fell below 15 cents per pound. The low delivery price and small quantity indicate insufficient actual demand. [4] - With the decline of the external market price, China's out - of - quota import cost has dropped from around 6200 yuan per ton to about 5600 yuan per ton. Currently, China is in the best import profit window in the past 5 years, with the out - of - quota spot import profit exceeding 600 yuan per ton and the out - of - quota import profit on the futures market exceeding 100 yuan per ton. The import supply is likely to increase in the second half of the year. [4] - In June, Brazil exported 3360000 tons of sugar, an increase of 1100000 tons from May and 160000 tons from last year. The sugar exported to China in June was 760000 tons, an increase of 240000 tons from May and 320000 tons from last year. The supply of processed sugar in the spot market has increased recently. [5] 3.2 Domestic Price Spread Structure - As of the end of May 2025, the 2024/25 sugar - making season has ended. The national sugar production was 11.1621 million tons, a year - on - year increase of 1.1989 million tons, or 12.03%. The cumulative sugar sales were 8.1138 million tons, a year - on - year increase of 1.521 million tons, or 23.07%. The cumulative sugar sales rate was 72.69%, 6.52 percentage points faster than the same period last year. The industrial inventory was 3048300 tons, a year - on - year decrease of 322100 tons. [14] - If the import supply increases as expected in the second half of the year, the basis between the spot and futures prices may return, and it is more likely that the spot price will return to the futures price. [15] - The monthly spread structure of the futures market is contradictory. The 9 - 1 spread of Zhengzhou sugar has a positive spread, the 7 - 9 spread has a reverse spread, and the 1 - 5 spread fluctuates around 50 yuan per ton. The valuation of the September contract of Zhengzhou sugar is relatively high compared with other contracts. [15]