Drought, poor agricultural practice and competition from more profitable crops mean China will not, after all, raise its sugar production this year.

Cane yields in Guangxi province, which accounts for more than half of domestic sugar output, have been dented by dry spells during planting and "critical" summer growth periods, and by little rotation with other crops, a US report from Beijing said.

Poor farm practices have left the Tai 22 cane variety, which accounts for more than 90% of plantings in Guangxi, "more prone to disease and pest damage", according to industry sources.

"Dominant varieties have degraded," the report said.

Meanwhile, sugar beet production will slump by 30% to 7.0m tonnes thanks to a hangover of poor prices from mills last year, which prompted growers to switch to grains or oilseeds.

Stocks to drop 

The attaches cut to below 13.2m tonnes their forecast for sugar output in China, the world's second-biggest producer, representing a 9% cut on their initial estimate, and a 1.2% fall year on year.

However, the drop would be absorbed by a decline in stocks, set to slump 41% to 2.05m tonnes during 2009-10, rather than require an increase in imports above historic levels of about 1m tonnes.

Beijing bought about 650,000 tonnes of sugar in the last marketing year under a scheme to support the sector at a time when low prices left mills running at a loss.

Structural issues

While some sources have forecast that Guangxi cane yields could drop by up to 40%, with cane plants standing 10-20 centimetres shorter than normal, there was still some scope for crops to catch up.

"If more rainfall arrives in the coming months, the yield will improve for some later-maturing varieties."

Nonetheless, the briefing highlighted the structural difficulties facing cane, including the difficult of irrigation, given that much of the crop is planted in hilly or remote regions.

On better land, nearer to urban centre, it faces competition from bananas, papayas and vegetables, which typically provide higher returns.

In Guangxi, one response to drought had been to replace cane with cassava.