Many industries face the risk of sugar price fluctuations

According to the statistics released by the provincial sugar associations, it is expected that during the 2014/2015 crop season, a total of 1125 to 11.3 million tons of sugar will be produced, a reduction of 2 million tons, and a reduction of 15%. Sugar-based beverages, confectionery, cakes, biscuits, dairy products and many other industries are facing the risk of sugar price fluctuations and the risk of raw material purchases.

The overcapacity in the domestic sugar industry, coupled with the excessive import of cheap sugar to suppress sugar prices, from 2012 to about three years this year, "Gao Gaozong" was pulled from the price of up to 7,000 yuan per ton to a low of 4,000 yuan. However, industry insiders predict that the three-year overcapacity cycle in China has come to an end. The new domestic policy is to control the import of sugar. It is expected that the sugar price during the 2014/2015 squeeze period will be boosted. It can be seen that beverage, candy, and cake companies that use sugar as their main raw material are facing the risk of falling profits due to rising sugar prices.

According to the public data of 2010, the raw material cost of liquid milk accounts for about 5% of sugar; for confectionery raw material costs, the cost of sugar accounts for more than 40%; for the cost of cakes and biscuits, sugar accounts for about 20%; fruit juice, carbonated beverages, etc. In the raw material costs, sugar accounts for about 30%. Industry sources pointed out that although some companies adopt cost control through large-scale procurement and early signing of procurement agreements at low prices, to some extent ease the pressure of rising costs, but there are still profits due to rising raw material prices The risk is that some sugar companies will pass on costs by increasing product prices.