CHINA’S sugar demand looks to hold steady this year, with lower prices giving corn-based additives a growing advantage in the sweeteners market, said an association official.

    Sugar consumption by the world’s second-largest user may hold near last year’s level of around 16 million tons, Liu Hande, deputy secretary general of the China Sugar Association, told a conference in Zhengzhou on Saturday.

    “The main reason is corn prices are relatively low. Next year (corn) substitution (for sugar) will be quite noticeable,” said Liu.

    Chinese corn prices are under pressure from a bumper harvest as well as lower prices being paid by the State stockpiler this year.

    Local governments in major corn-growing regions are also offering subsidies to industrial users to help them purchase corn, a move that could help sweetener makers step up their output after years of recording losses.

    Sugar demand has already weakened in 2014/15, with the association recently reporting sugar sales down almost 16 percent from the previous year to 9.6 million tons, impacted by relatively cool summer weather and a slowing economy.

    Analysts say Chinese consumers are also buying less sugary drinks as health concerns grow among the middle class.

    Weak demand could pressure domestic sugar prices, reducing the margin on less expensive overseas sugar and denting demand for imports that have surged in recent months.

    (SD-Agencies)