During the 2020/2021 season, the mongolian sugar industry peaked in history, but the 2021/202 season turned sharply and the market generally expected a 40 per cent cut in production. At a time when beet production is not yet complete, the market has been trading for a substantial reduction in the production of seasoned beet sugar, but how is beet actually grown and grown? What will be the impact of a significant reduction in sugar production on the pace of enterprise production and the marketing of new sugar? With the end of beet cultivation and its entry into a fast-growing and long-term environment, a study of the beet-producing areas in the north and the interior of mongolia was conducted with a view to obtaining first-hand information that would provide investors with some reference information。
The inner mongolia beet sugar industry is evolving
The first sugar factory in inner mongolia (the sugar bunt factory) was built in 1955, opening up the sugar industry in inner mongolia. After more than half a century of baptism, from a planned economy to a market economy, from a monolithic one to a giraffe to a merger to a re-emergence, to a new milestone in the mongolian sugar industry during the 2020/2021 squeeze season, the production of sugar reached its highest level in the history of 891,000 tons, an increase of 166,000 tons over the same period, making it the third largest sugar-producing area in the country。
In mongolia, only six sugar mills were in operation in five groups during the 2015/2016 squeeze season, and a number of enterprises have invested in new plants in mongolia, following the continued rise in domestic sugar prices and the favourable profitability of the sugar industry. By the 20/21 season, there were 8 sugar groups in inner mongolia, 14 sugar factories (including zhangbei) with a daily average beet processing capacity of 65,000 tons. However, the construction of the plant was easy and it was difficult to guarantee beet-based raw materials, with 14 sugar plants operating during the 2019/2020 season, and the hofonzat sugar plant having been built but not produced for seven days because of the shortage of raw materials; the forthcoming 2021/202 season will also shut down the naiman ling wan sea sugar plant due to the shortage of raw materials。
According to statistics on production during the 2020/2021 squeeze season, of the eight sugar groups, one, with more than 200,000 tons of sugar, three, with between 50,000 and 100,000 tons of sugar, and one, with less than 50,000 tons, shows a small, medium distribution and low concentration of production. The distribution of sugar produced in the 2021/202 season will be significantly adjusted due to a different contraction of raw materials。
New changes in beet cultivation
In inner mongolia, beet cultivation is divided into three types of live, small live and paper-candle planting at low to high costs, with a difference of approximately 200 yuan/acre. Directly through large-scale sowing machines, beet seeds are planted on the ground, with single-line seeding, with a distance of 50 cm, with efficient seeding, often using a blow-ring for irrigation, ease of management, low planting costs, with the disadvantage that internal mongolia is characterized by high wind and low temperatures and low seeding rates. The greatest difference between live and live broadcasts is in the membrane, which is usually dredged under the membrane, with a double line, with a distance of 40 cm on the lid, with an average distance of 70 cm on the rim, and with an average distance of 55 cm below the evaporation rate, with the advantage that the membrane cover reduces evaporation and is able to stay warm, with a preoccupancy rate higher than that of live broadcasts, a new seeding pattern that has evolved over the past two years. The advantage of shifting the cylinders, which need to be bred in large sheds before being moved to daejeon, is that they have a high rate of seedling but are time-consuming and costly. The current percentage of paper cylinder transplantation in inner mongolia is decreasing, and the live mode, especially the low drop-down, is flourishing, laying a good foundation for the development of beet cultivation。
Seed planting patterns for beets differ significantly from root planting patterns for sugar cane, resulting in beet growth becoming more sensitive to weather hazards. The growth cycle of beet is divided into nursery, leaf-breeding, root-brow growth and sugar fraction accumulation periods. In terms of local beet growth in inner mongolia, young seedlings are worried about wind sand and cold weather, medium-term concerns about hot weather (which is prone to brown spots in july-august) and sugar is associated with high night and night temperature differentials and low rainfall, while the harvest period needs to be wary of extreme temperatures that make beet harvest difficult。
Inner mongolia, the size of the area is vast, the latitudes for beet cultivation are wide, there are wide variations between sugar menus and sugar in different regions, usually high sugar in cold areas, and high single-production areas with high effective temperature, long fertility periods for beets, including bungalows, crests, etc., where high sugar production is low and high yield low. According to statistics for the 2020/2021 season, the average sugar beet sugar in inner mongolia is divided into 15. 479 per cent, of which more than 16 per cent are found in the sugar industry of kyushu, the stun sugar industry and zhangbei, 16. 66 per cent, 16. 4 per cent, and less than 14 per cent are found in the sugar industry of ceifang, neman lingyun sea and aki akeng, 13. 891 per cent, 13. 9 per cent, and the rest of the sugar industry is in the range of 14. 65-15. 93 per cent; the average sweet menu produces 3. 2 tons/acre, of which the red peaks reach 4. 05 tons/acre, and the sugar industry of sakaegawa is close to 2. 6 tons/acre. As a result, the average single production of sugar beet in inner mongolia is much lower than that of sugar cane (the average of 4. 4 tons per acre in the five squeeze seasons of guangxi), but the sugar content is higher than that of sugar cane (the average of 14. 4 per cent in the five squeeze seasons of guangxi)。
Following the rapid development of the 13th and 55th periods, the whole process of mechanization of sugar cane cultivation and harvesting in the inner mongolia has been largely achieved, which is incomparable to the sugar industry and one of the factors conducive to its rapid development. However, the beet farming industry is lagging behind, with more than 95 per cent of beet seeds imported abroad, and sugar factories buying seeds to farmers, while controlling beet varieties, are unable to meet regional demand for improvement。
Land migration and the growing maturity of rural cooperatives differ significantly from sugar cane-based farming patterns. In a sugar factory, for example, households account for 2. 5 per cent of the area under 50 acres, 51-100 acres of 5. 5 per cent, 101-500 acres of 65 per cent, 501-1,000 acres of 24 per cent and over 1,000 acres of 3 per cent. It can be seen that beet cultivation is the dominant 100-1,000 acres, while in guangxi cane, more than 100 acres are already large households. In addition, individual sugar plants develop their own farms, which guarantee the quality and quantity of beet. An example of this is the royal sugar industry under the banner of the knight's dairy industry, which piloted beets in 2017, officially started beet cultivation in 2018 and officially started production, with an annual supply of about 60 per cent of beet by the three years of 2020。
The inner mongolia beet industry is fully market-oriented, sugar factories establish purchase prices before planting, enter into purchase orders contracts with vegetable farmers, pay for vegetables before the general spring festival, and sugar factories have heavy marketing tasks before spring. The traditional method of acquisition has been revalued, and in recent years it has gradually moved towards a qualitative price, which has become more widely used and more manageable, especially in high sugar areas. However, water can carry a canoe, and the reduction of beet production + low sugar years discourages cultivation。
Rapid decline in beet cultivation in mongolia during the 2021/202 season
In 2021, most domestic mongolian sugar plants maintained the 2020 beet purchase price and individual firms made small increases, but it was difficult to avoid a significant decline in beet cultivation. According to business statistics and field research data, the area under beet cultivation is expected to fall by just under 1. 3 million acres in the 2021/202 season, a decrease of 1 million acres, or 43. 47 per cent, from the 2020/2021 season. In addition, owing to poor weather conditions and slow growth rates, it has been difficult to rely on increased monolithic production to compensate for the loss of the area, with an initial estimate of a reduction in sugar production to 500,000 tons during the 2021/202 season and a reduction of 391,000 tons compared to the 2020/2021 season, a reduction of 43. 9 per cent, which fell sharply to near the 2016/2017 season。
Of the 13 sugar plants operating during the 2020/2021 season, with the exception of one sugar plant, which indicated that the area under beet cultivation for the 2021/202 season had been flat, the remaining sugar plants had experienced varying degrees of contraction. Of these, five sugar plants had lost more than 50 per cent (one was shut down because of a severe shortage of sugar), five had decreased between 20 and 50 per cent, and only three had decreased by less than 20 per cent (including parity)。
First, the most significant impact has been the sharp rise in maize prices and the resulting rise in land rents. Since the second half of 2020, maize prices have been high, and by the first quarter of 2021, maize futures contracts have increased by almost 30 per cent, maize purchases have reached 1. 4-1. 5 yuan per pound, and cultivation subsidies have increased in motivation. In response to this stimulus, in 2021, the land rents in various parts of mongolia rose from an average of 400 to 700-800 yuan/acre, and in some areas even exceeded 1,000 yuan/acre, resulting in a significant increase in the cost of beet cultivation, far less than maize, with the most significant impact on peak peak and surrounding areas. With high yields of maize cultivation and less expensive care for beets, for businesses, a modest upscaling of beet prices will have to be considered in the future in terms of how to raise the price of singles and sugar in order to maintain the incentive to grow water and water。
Second, in the city of ulanchab, the city of “china potato” in central mongolia, where the subsidy for the cultivation of potatoes is around $500/acre, beet is only marginally subsidized at the local level (unsubsidized west of hout and hout), and the proceeds of beet are at a disadvantage. At the same time, in order to protect groundwater resources, the ulanchab region began to undergo a process of water conversion to drought, with many vents being removed, less water being poured, higher land rents and more passive beet cultivation。
In addition, sugar fell in some areas during the 2020/2021 season, while beet purchase prices remained unchanged, with qualitative prices in place and farmers not earning money, while the 2021/2022 season continued to maintain the original purchase prices and to discourage cultivation. The study also found that, influenced by the past mentality of “land consumption for beet cultivation”, some farmers were reluctant to rent their land to beet growers, resulting in many large families wanting to grow beet without land。
In addition, since mid-april, most parts of inner mongolia have suffered from heavy wind and sand, low temperatures in the eastern region, delayed beet planting, and by late may and even early june, a number of areas were planting and shifting beet. During the study, too, there was widespread hailing weather, beet leaves were broken, long delays in life, and sweet menus made much more optimistic. However, this year the incidence of lignoma is relatively low and attention is paid to later developments。
Rising costs of sugar production
Industrial prices have risen and sugar mills have difficulty avoiding the risk of increased costs of assistive materials, unlike sugar cane sugar mills, where home-made sugar cane slag is the source of energy, beet sugar plants have to bear the risk of rising energy prices. Even worse, the fall in the area of beet will result in the unsatisfied use of raw materials for sugar plants, a rise in the cost of depreciation of tons of sugar, labour, etc., and a positive correlation between the increase in costs and the decline in sugar production, with a correspondingly large difference between sugar plants and a more passive reduction in sugar production。
By-products of sugar cane sugar plants include cane dung, waste honey, etc., and by-products of beet sugar plants are granite and waste honey. By-product output rates vary slightly due to fluctuations in sugar composition. The average sugar cane cane is close to 23 per cent and 3. 3 per cent, while the average cane bagging rate (excluding power generation and paper) is about 6 per cent; and the granite and waste honey output rates for beets are close to 5 per cent. The sugar mills in the north benefited from a substantial increase in the price of by-products: the price of cane dregs in guangxi rose from $100 to $150 per ton in the upper season to about $400 per ton in the upper season and the price of waste honey from around $800 to $1,400 to 1600 per ton in the middle of the upper season; the price of granules in inner mongolia rose from $1,500 per ton in the upper season to $2,400 to 2,500 per ton (approximately $600 per ton for processing) and the price of waste honey rose from $1,000 to $1600 to 1800 per ton. The price of beet sugar by-products is expected to remain high during the next season, partially reducing the increased pressure on sugar plant costs。
The new sugar is going to be out of control
In theory, reduced production and later years of cultivation, late beet harvests help to continue to accumulate sugar, partially compensating for the loss of beet volumes, but all-round constraints push away. First, the cold climate in the four quarters of inner mongolia requires early beet collection for preservation, the presence of beet being frozen in the ground at night, and the impact of objective weather conditions. Second, as in sugar cane-producing areas, sugar beet mills also have raw materials that are less likely to delay extraction and are looted for fear. Third, the price of sugar affects the start-up. If sugar prices are good and are expected to be high, early start-up is considered. The early start-up of raw materials in previous years was difficult to organize and could not be delayed in the following season, but it was not deliberately delayed. As a result, the pace of marketing of new mongolian sugar during the 2021/202 season has been pushed back, production periods have been shortened, extraction will be ahead of schedule and sugar stock pressure has decreased。
Post-market outlook
As a result of multiple factors, the mongolian beet sugar industry is facing serious challenges during the 2021/202 season, with a sharp decline of 43. 47 per cent, 43. 9 per cent and more than expected in the area under sugar cultivation and beet sugar production over the same period. For the 2021/202 season, only one of the 13 sugar mills produced during the 2020/2021 season had averaged the area under beet cultivation, while the rest had declined to varying degrees, a sugar plant had to be cut off owing to the excessive fall in the area under cultivation, and the cost of producing tons of sugar would increase significantly, and high by-product prices could alleviate part of the pressure. However, two sugar mills are planning to open before the fourth of july, most of which are scheduled for about 10 october, slightly later than the 2020/2021 season and before the harvest, and the sugar stock pressure is lower than the 2020/2021 season。
Looking to the future, there is a lack of policy support for sugar cultivation in inner mongolia, industry development depends on well-cared sugar, constrained by competitive crop shocks, rising land rents, drought and water, and the urgent recovery of beet cultivation is primarily dependent on higher beet purchase prices/gains. However, it requires technological innovation to boost the production of individual products and sugar, develop new technologies, grow large farmers, and ensure the supply of raw materials, drawing on home-grown models. The sugar industry in inner mongolia has largely mechanized the beet cultivation and harvest, and households are growing on a much larger scale than the sugar cane industry, with an advantage in terms of future prospects. (author's unit: midstate futures)
