"Sugar Gaozong" does not abdicate sugar prices but it runs at a low profit

Under the effect of severe cold weather, sugar futures prices have recently reappeared ferocious gains and approached historical highs. On January 4, domestic sugar futures closed at 7,180 yuan per ton, again approaching the record high of 7521 yuan per ton set in early November 2010. At the same time, the wholesale price of sugar has been operating at a high level recently, and the retail price has also risen.

Since August 2010, the domestic sugar price has entered a rapid surge, and the tiny white sugar has become a "high sugar" and has not yet been "abdicated." What are the reasons for the high price of sugar? “The theory of supply and demand imbalances,” “intermediate fare increase”, and “hot money hype” all danced incessantly and constantly filled people’s eyes. Many people believe that sugar prices continue to rise, benefiting the most sugar companies. To this end, the reporter went to Chongzuo City, Guangxi, China, which is the “Sugar Capital” that produces 20% of the country’s total sugar, and interviewed Zhu Guangcai, general manager of Xianggui Sugar Factory.

"The current price of sugar is reasonable, not speculative."

The price of sugar has risen all the way. The outside world thinks that speculators have gone up. Zhu Guangcai did not think so.

"I think the current price of sugar is reasonable." Regarding sugar prices, Zhu Guangcai emphasized it from the beginning. He used the law of value to explain to reporters the soaring price of sugar. “Why is it reasonable? Because under this price, everyone agrees and trades, indicating that this price reflects the value of sugar to some extent.”

Since October last year, Chongzuo's major sugar mills have been squeezed one after another, and new sugar has continued to enter the market. According to the data of the "CSI domestic sugar spot price index chart" of Yunnan Sugar Online, since November 10, 2010, the historical highest price of 7517.62 yuan / ton, the domestic spot price of sugar has been in the 6900 to 7200 yuan / ton. .

Zhu Guangcai said that if the speculators really fry the price of sugar, the price of sugar will not rise from last year until now. "If high sugar prices are really speculative, then the price should go down after the new squeeze season. In fact, it is not."

Each year's crop season is a multi-year sugar mill. From October of the first year to May of the following year, sugar is generally sold out in October of the following year.

"From August to October, when sales entered the end of the year, there was no sugar in everyone's hands. The price of sugar soared this time. It is understandable. But it is still around 7,000 yuan. It shows that sugar is indeed a gap between supply and demand and it is not being fired. Higher prices.” Zhu Guangcai analyzed the reasons for the higher sugar prices.

Last year, Guangxi suffered a drought. The sugarcane production in Chongzuo City was affected and the sugar mills were inevitably implicated. According to Zhu Guangcai, during the 2009/2010 crop season, Xianggui Sugar Factory cut its output by 18% compared with the previous crop season.

In addition to the supply and demand reasons, Zhu Guangcai believes that the increase in the cost of sugar production is also the driving force behind the high price of sugar. "This year's skyrocketing prices have raised costs in all aspects. As far as the sugar industry is concerned, the cost of sugar cane has risen, the cost of machinery and equipment in sugar mills has risen, and the cost of employing people has increased. Can you say that sugar prices can rise?"

Regarding the increase in costs, Zhu Guangcai said that sugar cane has the largest "contribution". "Because of lower sugar yield, a ton of sugar could be squeezed out of 10 tons in the past year, and 12 tons of sugar could be squeezed out this year. This part of the increase in the cost is the most obvious."

"High-sugar price sugar companies are operating at low profit"

High sugar price operation, sugar companies benefit most? Zhu Guangcai clearly expressed disagreement. He enumerated several figures for reporters: For every 100 yuan in price of sugar, the income of the peasants accounted for 48 yuan, and the tax revenue was 23 yuan. The rest of the money went to sugar mills.

“The price is even higher, and the sugar factory is not the most profitable party. The company is only selling at a smooth price. The real beneficiaries are sugarcane farmers.” Zhu Guangcai felt aggrieved by the “benefit of sugar factory”.

At present, sugar sugar cane purchase prices in Guangxi sugar companies implement a sucrose hooking linkage system. The sugarcane sugarcane purchase reserve price, sucrose hooking price, and linkage settlement method shall be uniformly formulated by the competent price department of Guangxi on the basis of fully listening to the views of the governments of various localities, the sugar industry, the sugar industry, the representatives of sugarcane farmers and other parties. The purchase price of sugar cane is not determined by the company. At present, sugar cane purchase reserve price is 350 yuan / ton, once the sugar price is bullish, companies have to be based on the market to increase the "money" to farmers.

Zhu Guangcai also gave reporters a set of figures: the basic production cost of sucrose is between 3,600 and 3,700 yuan/ton, plus taxation, inventory costs, logistics costs, and support for sugar cane farmers for roads, seeds, etc. The total cost of sugar has reached 4,500 yuan. /Ton. Now that commodity prices are soaring, the increase in the cost of all aspects of the industry continues to “add up” the total cost of sugar. The cost of making sugar rises faster than the rise in sugar prices. The sugar mills are still running at a low profit.

But at the same time, he also stated that the sugar factory hopes that the sugarcane farmers will benefit, which is considered from the perspective of sustainable and scientific development of the sugarcane industry. Zhu Guangcai made an analogy. The farmer's sugar cane field is the first workshop of the sugar mill. Without sugarcane farmers, there is no sugar factory. How can a sugarcane farmer directly affect the sugar mill?

In order to guide and support farmers in planting sugarcane, Xianggui Sugar Factory has made great efforts. Xinhe Town, Jiangzhou District, Chongzuo City where the Xianggui Sugar Factory is located has cement roads. This is mostly due to the credit of the Hunan Guigui Sugar Factory in order to make it easier to transport sugar cane-laden carts into the sugar factory.

Support is not only reflected in infrastructure construction. In the sugarcane planter's cost of planting sugar cane, Xianggui sugar factory also gave a lot of subsidies, such as the need for mulch film species, subsidies 30 yuan per mu, machine farming is 80 yuan per mu. According to Zhu Guangcai, sugar mills will invest more than 10 million yuan this year in subsidies for sugarcane farmers, including construction of water conservancy facilities.

Zhu Guangcai also said that high sugar prices actually sent a warning signal that the country should raise its sugar reserves to the level of strategic reserves, and that it should also properly subsidize sugarcane farmers.

Regarding the reduction of sugarcane production, Zhu Guangcai believes that the impact of climate factors is partly due to the reduction in planting area. The reporter learned that in the large fields opposite the sugar factory, the sugar canes that were planted before were all high and homogeneous. Now they are replaced by watermelon, cassava and other cash crops.

“The farmer here grows sugarcane just for a farming habit. Once the sugarcane is grown, it will be converted into other crops. This requires the guidance of the government and the services of the enterprise.” Zhu Guangcai said.

"Future sugar prices may continue to run high"

The reporter asked Zhu Guangcai to predict the trend of sugar prices this year. The shrewd businessman shook his head and dared not make a final decision. But he made a bold prediction: This year's sugar cane may increase production, but sugar may not increase production.

In the current 2010/2011 crop season, the sugar extraction rate of sugar cane in Chongzuo City was 0.7 percentage points lower than that in the previous crop season. According to the situation in previous years, the sugar cane of Chongzuo has a sugar yield of 12.5% ​​to 12.8%.

"This sugar rate is very low." Zhu Guangcai's face with a touch of worry. Chongzuo City expects the output of sugarcane to reach 21 million tons this year. "With a 21 million-ton sugarcane, a 0.1% drop in the sugar yield means that 21 tons of sugar are produced less." For sugar mills that calculate daily sugar consumption, this change is the easiest to feel.

Sugar cane has a low sugar content, which leads to a low sugar yield, and the culprit is “God.”

According to the introduction of local sugarcane farmers in Xinhe Town, in order to have a high sugar content in sugarcane, one must have sufficient sunlight and the other must have enough rainwater. However, these two conditions have not been met in the year of 2010 where meteorological disasters frequently occurred in Guangxi. In the first half of last year, Guangxi suffered a rare drought and was hit by floods in the second half of the year. At present, it is also facing a frost disaster. The production of sugarcane is cyclical, and the impact of unfavorable climate factors on sugarcane growth last year is expected to continue.

"This year's sugar cane production is expected to be more than last year, but sugar cane is not high in sugar content, and it does not produce more sugar. It is like a person who is sick and wants him to return to his former condition in a short period of time. This requires a process." Zhu Guangcai made an analogy.

“At this stage, frozen rain and snow have a great impact on sugar cane.” Zhu Guangcai said that sugar in the crop season may not be able to increase production, and there is a large supply and demand gap in the country, which may help the sugar price to continue to operate at a high level in the future.