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Strategies & Market Trends : Mish's Global Economic Trend Analysis
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To: Haim R. Branisteanu who wrote (27866)4/19/2005 6:38:33 PM
From: RealMuLan  Read Replies (2) of 116555
 
One black horse is the sugar production in China. As of now, the cost of sugar production in China is 42% higher than that of Brazil (the lowest sugar cost in China is $226.4/ton, while the cost in Brazil is $160/ton). Plus the current world market still has an oversupply for sugar, so the production in China is subdued.

But things will change. The high cost in China mainly due to the gov. bureaucracy and agricultural tax. In another 2 years or so, all the gov. tax will be phased out, as well as most of the bureaucracy (since those officials are there to collect tax), the sugar cost in China will decrease too. And then China may even start to export sugar<g>

Remember several years ago, the world was counting on China to import a lot of corn. But then instead of importing, China exports more corn. Similar thing might happen to sugar too<G>
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