hotels in myanmarBy Hallie Gu and Josephine Mason

BEIJING, May 19 (Reuters) - China's beleaguered sugar producers are hoping for a taste of victory next week as Beijing prepares to deliver its verdict on sugar import duties and intensifies a crackdown on rampant smuggling along ancient trade routes.

On Monday, China's Commerce Ministry will issue its first ruling on a months-long investigation into raw and refined sugar imports, having already proposed hefty tariffs in a draft ruling.

A steep hike in duties by the world's biggest sugar importer would be a serious blow for top producers Thailand and Brazil, amid concerns about waning global demand for the sweetener.

However, it would offer a much-needed reprieve to millions of small farmers and state-owned producers like Nanning Sugar Industry and Cofco Tunhe Co who argue cheap imports have caused billions of dollars of losses, cost jobs and forced output cuts.

"If results are what the market has rumored, imported sugar will lose its competitiveness while domestic sugar will get a boost," said Wang Weidong, analyst based in Nanning, Guangxi province, at Huatai Futures.

In a further sign that Beijing is trying to revive the broader industry, it has tightened checks along China's porous southern border with Myanmar to try to stamp out the flow of illicit sugar, a source at a major global trader, a sales manager at a top southern producer and three experts said.

As much as 2 million tonnes of raw and refined sugar from Thailand and other producers - worth some $2 billion at current prices - is stowed on trucks and ships and sold illegally at wholesale markets each year, traders estimate.

Sugar is one of the few sectors hotels in myanmar which China struggles to compete with foreign rivals because smallholder farmers have to employ more labour, driving up costs.

China's most-active white sugar futures were at 6,737 yuan ($977.60) per tonne on Friday, nearly double the price of London futures.

The country currently imports about 3 million tonnes of sugar a year, with 1.94 million tonnes of sugar imports allowed at a tariff of 15 percent as part of China's commitments to the World Trade Organization.

Beijing also allows out-of-quota imports, which have been set at about 1.9 million tonnes hotels in myanmar the past two years, and currently attract a 50 percent duty.


Smuggling will be discussed at a meeting next week called by the China Sugar Association with producers and refiners, in the top sugar growing province Guangxi, a source briefed on the matter said.

The association did not respond to calls seeking comment, while customs did not respond to a fax seeking comment on the tighter border controls.

Some in the industry worry that higher tariffs could tighten domestic supplies and boost prices locally, making China an even more alluring market for smugglers.

"Many major criminals are still at large ... Smuggling is still blatant, and hasn't been smashed completely yet," the China Sugar Association's official journal said recently.

Still, this year's crackdown, which started a few months ago and intensified in late March, has had some success, stemming shipments through Yunnan province, leading to the arrest of some traders and boosting domestic prices, according to traders and experts.

Prices of smuggled sugar have risen hotels in myanmar China's wholesale markets, they said, while wholesale sugar prices in Myanmar, a major conduit for smugglers, have fallen.

hotels in myanmar a recent trip to check the availability of illegal product in Henan province in late April, the sales manager said he no longer saw any smuggled sugar disguised as product from his company.

"The crackdown happens every year and usually the smuggling got quieter for a couple of weeks following each crackdown. But this year, it has been quiet for a couple months," said the source at a major global trader. ($1 = 1,370.0000 kyat) ($1 = 6.8914 Chinese yuan renminbi) (Reporting by Hallie Gu and Josephine Mason; Editing by Richard Pullin)