China’s refineries didn’t receive any Automatic Import Licenses (AILs) last month, as the Government discourages sugar imports during the country’s peak production period.
- However, this shouldn’t be a problem as China carried 1.5m tonnes of sugar over from 2020, meaning it’s in no rush to chase the expensive Thai and Indian raws.
- Instead, we think it’ll wait for Brazil’s new-crop sugar and import most of what it requires in 2H’21 (4.5 to 5m tonnes).
- With this, AIL issuance should commence at the end of March, once cane crushing, beet slicing, and China’s Spring Festival have occurred.
The refineries currently have around 1.5m tonnes of sugar in bonded stocks and awaiting AIL clearance, but the backwardated No.11 spreads support their decision to carry.
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