Shares in China’s major sugar producers jumped on Monday as investors worried supplies of the sweetener could be affected by the super typhoon.
“The impact was not as severe as predicted earlier. The super typhoon did not land in Zhanjiang, a major production area in Guangdong province, and did not affect crops in Nanning much,” said Wang Weidong, an analyst with Huatai Futures.
“If the weather turns good later, the rainfalls might even help increase the yield,” said Wang, who is based in Nanning, capital of Guangxi autonomous region, China’s top sugar cane-producing area.
Typhoon Mangkhut made landfall in Guangdong on Sunday, killing two people after wreaking havoc in Hong Kong and Macau. Over the weekend, it had ripped through the northern Philippines, killing at least 54 people.
Guangdong province produces about 1 million tonnes of sugar a year, around a tenth of the country’s output, while Guangxi’s annual sugar output is more than 6 million tonnes.
“The typhoon did not pass through areas with large sugar cane crops. The impact was limited. Some cane crops have fallen but they were mainly sugar cane for fruit use, not for crushing sugar,” said Lin, a manager at a major sugar mill in Guangdong who wanted to be known only by his surname.
While damage to sugarcane crops was still subject to further examination, the market has cooled on the news that the typhoon avoided major production areas, analysts said.
China’s sugar futures were nearly flat, down 0.1 percent on Monday.
The futures on Friday posted their biggest daily gain since July on worries about crop damage from the approaching typhoon.
Source:Reuters
