The hardships of domestic sugar companies are coming to the Ministry of Commerce to raise the tariff on imported sugar.

[ China Agricultural Machinery Industry News ] In recent years, under the impact of cheap sugar, domestic sugar prices have "recessed", and even the price of finished products is lower than the production cost, so that domestic sugar companies have actually passed a section. Hard days." However, this situation will change in the future.

The hardships of domestic sugar companies are coming to the Ministry of Commerce to raise the tariff on imported sugar.

On May 22, the Ministry of Commerce announced the final decision on the investigation of imported sugar security measures. The Ministry of Commerce determined that during the investigation period, the number of imported products was increased, and China's domestic sugar industry was seriously damaged, and there was a causal relationship between the increase in the number of imported products and serious damage. According to the recommendation of the Ministry of Commerce, the Customs Tariff Commission of the State Council has decided to implement safeguard measures for imported sugar products from May 22, 2017, and impose tariffs on tariffs for additional imported sugar. The term is 3 years, and the annual tax rate is 45%. It is 40% and the third year is 35%.

The "Daily Economic News" reporter noted that the current tariff rate of China's sugar import quota is 15% (with an additional tax rate of 50%), far below the 97% of the average sugar import tariff of WTO members. According to the common demand calculated by the sugar association members of each province for the internal and external price difference, only 155.9% of the tariff on imported sugar can guarantee the fair competition between imported sugar and domestic sugar.

The influx of sugar is cheap

The "Daily Economic News" reporter noted that the Guangxi Sugar Industry Association on behalf of the domestic sugar industry submitted an application for safeguard measures investigation to the Ministry of Commerce on July 27, 2016. The application claimed that the number of sugar imports increased sharply from 2011 to 2016, which caused an impact on China's domestic industry and caused serious damage to the domestic industry. Therefore, the Ministry of Commerce was requested to investigate the safeguard measures for the above products. Accordingly, the Ministry of Commerce decided to open a case investigation on September 22, 2016. The Ministry of Commerce determined that during the investigation period, the number of imported products was increased, and China's domestic sugar industry was seriously damaged.

The survey report of the research group of the Agricultural Trade Promotion Center of the Ministry of Agriculture shows that since the beginning of 2011, the world raw sugar prices have continued to fall. The price of the additional imported raw sugar refining tax decreased from 9,700 yuan per ton in January 2011 to 5,000 yuan per ton in January 2014, and further fell to 3,900 yuan per ton in September. In the same period, the average price of domestic sugar decreased from about 7,000 yuan per ton to 4,500 yuan per ton. The difference between the two was from 2,700 yuan per ton in January 2011, and the average price per ton of domestic sugar in September 2014 was higher than that of imported raw sugar. The after-tax price is even higher by 100 yuan.

The disparity in price spreads is that even in the case of quotas, sugar can still drive into the domestic market.

In accordance with the WTO commitments, China's annual import tariff quota for sugar is 1.945 million tons, the tariff rate within the quota is 15%, and the additional tariff rate is 50%. According to customs statistics, from 2001 to 2009, China's sugar imports remained at 700,000 tons to 1.4 million tons, accounting for about 3% of world trade. After that, the import of sugar increased significantly. In 2011, the amount of tariff quota exceeded 1.945 million tons, reaching 2.919 million tons. In 2013, China imported 4.546 million tons of sugar, an increase of 21.3% over the same period of last year, exceeding the quota of 2.6 million tons, equivalent to the third quarter of China's sugar production. About one point.

In 2014, sugar imports reached 3.49 million tons, and in 2015 it was 4.85 million tons, an increase of nearly 66% over 2011. The proportion of sugar imports to total sugar production in China rose from 27.37% in 2011 to 47.22% in 2015.

Domestic sugar companies have been "hard days" for many years

Haitong Securities Research reported that domestic sugar prices have continued to decline since the second half of 2011, and once fell below RMB 4,000/ton in September 2014. In fact, international sugar prices have been lingering at low levels for many years, resulting in high internal and external price gaps, which has also brought domestic sugar companies a “bitter day” of deep losses from 2012 to 2014.

In fact, under the rush of cheap sugar imports, the “defense line” of domestic sugar prices has retreated. In 2011, the domestic sugar price was still about 7,600 yuan per ton, and by 2014, the domestic sugar price dropped to about 4,000 yuan per ton. For domestic sugar companies, this is a figure that falls below the cost price: domestic sugar production costs about 4,300 yuan to 4,800 yuan per ton.

It is worth noting that the Ministry of Commerce data show that the global sugar supply has been seriously overspent for five consecutive years from the 2010/2011 crop season to the 2014/2015 crop season. The excess production reached 6.28 million tons, 12.13 million tons, 11.14 million tons and 7.93 million tons respectively. And 598 million tons.

According to the statistics of China Sugar Association, due to the imbalance between supply and demand and the impact of imported sugar, the industry lost more than 3 billion yuan in 2013, and the total profit and tax decreased by about 90%. Ge Junjie, former vice president of Shanghai Guangming Food Group and chairman of Shanghai Sugar Wine Group, said in an interview with the reporter of “Daily Economic News” that “in 2014, the loss of domestic sugar industry expanded to more than 10 billion yuan”.

The price that falls below the cost brings about a large stagnation of production capacity. China Sugar Industry Annual Report data show that from 2011 to 2015, the domestic sugar industry operating rate was 68.44%, 77.72%, 80.35%, 78.72% and 63.97% respectively. It can be seen that the industry operating rate from 2014 to 2015 decreased by 1.63 and 14.75 percentage points respectively compared with the previous year. The operating rate in the first quarter of 2016 was 56.35%, a decrease of 9.24 percentage points from the same period in 2015.

The implementation period of safeguard measures is 3 years

According to the recommendation of the Ministry of Commerce, the Customs Tariff Commission of the State Council decided to implement safeguard measures for imported sugar products from May 22, 2017. The safeguard measures adopt the method of levying tariffs on tariffs with additional imported sugar. The implementation period is 3 years and the measures during the implementation period are gradually relaxed. The tax rate is 45% from May 22, 2017 to May 21, 2018, 2018. The tax rate is 40% from May 22 to May 21, 2019, and the tax rate is 35% from May 22, 2019 to May 21, 2020.

Guo Jingli, a researcher at the Agricultural Research Institute of the Chinese Academy of Agricultural Sciences, told the reporter of the Daily Economic News that “the current import price of sugar imports is about 4,000 yuan per ton. According to the new safeguard measures, the additional tariff rate is 50%, plus The levy is 45%, that is, according to the high tariff of 95%, the cost per ton will increase by about 1,000 yuan, and the import price of sugar will be close to 6,000 yuan per ton."

After implementing the above measures, the price gap between imported sugar and domestic sugar will be reduced. The reporter reviewed the spot price monitoring of sugar in Guangxi on May 22, and found that the sugar price of the sugar group in Guangxi and Yunnan was between 6,500 yuan and 6,700 yuan.

Guo Jingli believes that "sugar is a relatively stable downstream demand. Basically, China's annual sugar demand is about 15 million tons, while domestic self-production supply is about 8 million tons to 9 million tons. There are still about 7 million tons. Demand gap, among which illegal trade and national reserve sugar dumping are all uncertain factors."

For sugar companies, this projected increase in price is in an "acceptable" range. A person in charge of a dessert production company told reporters that "the price increase of sugar will bring about an increase in production costs, but on the one hand, the cost can be minimized by adopting alternatives, and on the other hand, the proportion of sugar in the total cost structure is relatively low. Therefore, if it is a ton increase of more than 1,000 yuan, it is still acceptable."