Typhoon Haiyan: Rains hit China's sugar belt, impact limited

A woman carries her baby across an area damaged by Typhoon Haiyan at Tacloban city, Leyte province, central Philippines on Tuesday, Nov 12, 2013. Heavy rains triggered by a deadly typhoon which has devastated the Philippines knocked down sugarca
A woman carries her baby across an area damaged by Typhoon Haiyan at Tacloban city, Leyte province, central Philippines on Tuesday, Nov 12, 2013. Heavy rains triggered by a deadly typhoon which has devastated the Philippines knocked down sugarcanes in China's main growing province, but the impact on output and domestic prices may be limited, trade sources said on Tuesday. -- PHOTO: AP

SINGAPORE/BEIJING (REUTERS) - Heavy rains triggered by a deadly typhoon which has devastated the Philippines knocked down sugarcanes in China's main growing province, but the impact on output and domestic prices may be limited, trade sources said on Tuesday.

Production in China, the world's second-largest sugar consumer after India, had been expected to be little changed in the 2013/14 crop year at 13 million to 13.5 milion tonnes.

"Areas of Guangxi had 100-250 milimetres of rain overnight, which is a deluge for this time of year. Rains will reduce sugar content, and delay the harvest in many areas," said a dealer in Singapore.

"The market isn't too worried because China has high stocks," he added.

Fewer than 10 per cent of Guangxi's 103 sugar mills had started harvesting before the typhoon hit, said a China-based dealer. China's southern region, on the border with Vietnam, accounts for about two-thirds of its sugar crop. Neighbouring Hainan and Guangdong provinces usually begin harvesting in December.

"The typhoon knocked a lot of cane to the ground in both Guangxi and Hainan but it's very difficult to estimate losses.

The mills need to do more detailed surveys," said the Chinese dealer.

A local media report from Guigang city, located in the south-east of Guangxi province, said more than 667 hectares of cane had been knocked over by the typhoon, reducing hopes for what had been expected to be a bumper harvest.

"Typhoon weather usually benefits cane crops more than they damage them. Guangxi hadn't had much rain in the last month,"added the Chinese source.

A drop in Zhengzhou white sugar futures 0#CSR: suggested the market has discounted the impact of Typhoon Haiyan, which destroyed some cane plantations in the Philippines and killed an estimated 10,000 people.

China consumes about 7 per cent of world sugar output and is often seen as a bright spot in an oversupplied market.

Consumption is seen rising about 5 per cent to 15 million tonnes in the year to September 2014.

Inflated domestic prices, driven up by government stockpiling, have provided a strong incentive for private buyers to import sugar, supporting global prices.

Industry sources say it is unclear if China will continue its stockpiling programme in the new marketing year to September 2014. The state reserves are estimated to hold 6-7 million tonnes of sugar, after adding 1.8 million tonnes in 2013.