Brazil recovers its position as China´s first ranked sugar supplier

Data from China´s General Administration of Customs (GACC) indicates that in June, Brazil returned to being the main supplier of sugar to the Asian country, accounting for more than 60% of imports.

Until 2016, China was the largest market for Brazilian sugar abroad, with purchases that reached 2.5 million tonnes per harvest. In 2017, however, Beijing imposed a surcharge on the entry of the Brazilian product to protect its domestic production, which slowed sales. In the 2017/18 cycle, with the barrier already in place, the volume dropped to 115,000 tonnes.  But later on, the Chinese also restricted the entry of sugar from small producing countries into their market. With that, Brazil, the most competitive market in the world, increased exports to China again, but still not at the same levels as before.

This year, Brazil abandoned a complaint at the World Trade Organization (WTO) and avoided opening an investigation committee against China because of the surcharge, after Beijing pledged not to extend it beyond May 2020. Thus, the rate outside the quota, which was 85%, was again 50%.  As a result, Chinese imports of Brazilian sugar, which totaled just 145,300 tonnes between January and May, jumped in June to 239,400 tonnes, an increase of 477% in relation to the same month last year.

Brazilian shipments already accounted for 63% of the total imported by China in June. The other three main suppliers to the Asian country in the month were Cuba (16.3%), El Salvador (11.9%), and Guatemala (7.6%).

The following chart shows Brazilian sugar exports to China and the rest of the world month by month since 2017:

Brazilian Sugar Exports to China x Other Destinations | Jan 2017 to Jun 2020 | WTMT

Graph source: DataLiner (To request a DataLiner demo click here)

Source of report: Valor Econômico

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