Government Intervention
The Chinese government controls its domestic sugar market and protects domestic producers from low world dump market prices by maintaining much higher domestic prices.
Sugar trading companies owned by the government account for roughly 70% of all domestic sugar sales.
The government also accumulates stocks in order to remove sugar surpluses that could deflate domestic prices.
China is required by the WTO to import sugar through a tariff rate quota system. Foreign sugar producers not included within this quota system face a high duty and are, therefore, unlikely to send sugar to China and depress its domestic market.
China 's WTO-allowed sugar import tariff rate is 76%.
Imports that enter China are strictly regulated through government licensing arrangements, meaning the government trading enterprises retain control of the flow and dispersal of imports.
Refined sugar imports are a rarity in China because the government prefers raw sugar imports that can be refined domestically and re-exported by state-owned trading companies.
Production and Price
China produces 10.6 million metric tons of sugar a year, making it the fourth largest producer in the world.
Like almost all sugar producers, China cannot survive on dump market sugar prices, which are barely half the world average cost of production.
Wholesale sugar prices in China were 14 cents per pound last year, 40% above the world dump market price.
Trade with America
Like the United States, China is a net sugar importer. It ships no sugar to America.
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