(Yicai) Sept. 11 -- Shares of some Chinese sugar producers, including Hongmian Zhihui Science and Technology Innovation, have rallied as international sugar prices jumped 25 percent in just over a month amid mounting concerns about global supply.

Sugar and food manufacturer Hongmian [SHE: 000523] has jumped about 19 percent over the past five trading days, while sugar producer and trader COFCO Sugar Holding [SHA: 600737] has gained about 24 percent over the past month.

International sugar prices began climbing rapidly last month. The Intercontinental Exchange's October raw sugar futures contract, the global benchmark for raw sugar prices, surged 25 percent in just over a month to a more than one-year high, according to Wind data. Expectations of lower output in the European Union and India, as well as a forecast for a 20 percent drop in Thailand's production in the 2026/27 crushing season, have fueled the rally.

Chinese sugar prices are also expected to rise in response to the international market, but abundant domestic supplies should limit the increase and its impact on consumer prices, according to Niu Zhe, an analyst at commodities information provider Sublime China Information.

The key drivers of the international sugar price rally are lower beet production in the European Union caused by El Niño, a climate pattern that can disrupt weather worldwide, expectations of reduced output in India and Thailand, and changes in India's import and export policies that have disrupted the global trade balance, Niu told Yicai.

The European Union and India had already indicated that production could decline before a Thai sugar industry organization recently forecast a 20 percent drop in the country's output for the 2026/27 crushing season. Thailand is the world's second-largest sugar exporter.

China is one of the world's five largest sugar producers and is also a major importer. Sugar consumption in the country totaled 15.7 million tons in the 2025/26 crushing season, including five million tons of imports, according to data released by a committee under China's agriculture ministry in August.

Domestic Prices Lag International Rally

The sharp increase in international sugar prices has not yet been fully transmitted to China's futures and spot markets.

High inventories have made it difficult for white sugar futures on the Zhengzhou Commodity Exchange and domestic spot prices to keep pace with international gains, Niu said. Chinese prices only began absorbing the momentum from the international market's August rally this month, he added.

The most-traded January sugar futures contract on the ZCE closed at CNY5,506 (USD820) per ton on Sept. 8, up 2 percent from the beginning of the month. White sugar in the spot market in Nanning, Guangxi province, was priced at CNY5,255 per ton, up 1 percent over the same period.

Niu said China's sugar output is expected to reach about 13 million tons in the 2026/27 crushing season, while carryover inventories should keep supplies ample. "As a result, the increase in domestic sugar prices will be much smaller than that of the international market, and the impact on everyday consumer prices will be limited," he added.

A COFCO Sugar securities affairs representative told Yicai that fluctuations in international sugar prices will affect the major sugar producer and trader's procurement costs.

However, COFCO Sugar sources globally, mainly from Brazil, Australia, Thailand, and India, making it difficult to assess the impact of an expected production decline in Thailand on the company or industry, the representative added.

Editor: Emmi Laine