Comparative Analysis of Sugar Production Cost in Guangxi and World Major Producing Countries

Boqian CHEN, Zhong HE, Qi LIANG, Xue TANG, Tingting LIN, Yongxian LIU,3,4*

1. Guangxi University, Nanning 530005, China; 2. Guangxi Green Food Group Co., Ltd., Nanning 530022, China; 3. Agricultural Resource and Environment Research Institute, Guangxi Academy of Agricultural Sciences, Nanning 530007, China; 4. Guangxi Plant Nutrition Engineering Technology Research Center, Nanning 530007, China

Abstract Guangxi is the largest sugar producing area in China and shoulders heavy responsibilities for the development of China’s sugar industry. In recent years, China’s sugar industry has been greatly impacted by the foreign low-cost sugar industry, and the planting area of sugarcane has been declining. The development foundation of the sugar industry is the sugarcane seed industry. Under the impact of foreign low-price sugar, China’s sugarcane industry is under greater pressure for development, and the sugarcane seed industry shoulders more arduous responsibilities. In order to cope with international competition, the development of Guangxi’s sugarcane industry urgently needs to establish a development model oriented towards improved varieties, scale and mechanization of sugarcane, so as to promote the high-quality development of Guangxi’s sugarcane industry and effectively respond to the pressure of competition in the international sugarcane industry.

Key words Sugarcane, Guangxi, Sugar producing countries, Sugar, Production cost

1 Introduction

Sugar is an important strategic material related to the national economy and people’s livelihood, and the sugar industry is also a traditional industry that China urgently needs to transform, upgrade and develop. In recent years, China’s sugar imports have been increasing year by year, and have now exceeded domestic sugar demand, which has brought a great impact on the domestic high-cost sugar industry. Today, sugarcane is the main raw material for sugar production in the world, and sucrose accounts for about 70% of the world’s total sugar. As the largest sugarcane producing area in China, Guangxi shoulders the task of ensuring the supply of important strategic materials for sugar in China. However, the current low level of planting, mechanization, and technology of improved varieties directly affects the development of the sugar industry. Under the sluggish environment of the world sugar industry cycle, a series of deep-seated contradictions and problems in China’s sugar industry have emerged, leading to the losses of the entire industry in recent years. The development foundation of the sugar industry is the sugarcane seed industry. How to ensure the healthy development of the sugarcane seed industry is of great strategic significance for ensuring the safety of China’s sugar industry and ensuring the basic sugar needs of the people. At present, the contradiction between the supply and demand of the sugarcane seed industry, the conflict of ideas, the technical shortcomings, and the market management are outstanding and restrict the development of the sugarcane seed industry to a certain extent. In view of these problems, based on the survey and analysis of the development status of the sugarcane planting industry in Guangxi, we performed a comparative analysis of the production costs of Guangxi and other major sugar producing countries in the world, for the purpose of providing a theoretical basis for reducing the production cost of sugarcane in Guangxi and enhancing the competitiveness of Guangxi’s sugarcane industry in the world.

2 Comparative analysis of sugar production in Guangxi and other major producing countries in the world

2.1 Comparison of sugar production capacity

2.1.1

Comparison of planting area and average planting scale of individual growers. In the 2017-2018 sugarcane crushing season, Brazil’s sugarcane planting area was 9.905 million ha, and the average planting scale of individual growers was about 63 ha; Australia’s sugarcane planting area was 400 000 ha, and the average planting scale of individual growers was about 65.6 ha; India’s sugarcane planting area was 4.952 million ha, and the average planting scale of individual growers was 1.07 ha; Thailand’s sugarcane planting area was 1.089 million ha, and the average planting scale of individual growers was about 4 ha; in 2018 and 2019 crushing season, Guangxi’s sugarcane planting area was 774 000 ha, and the average planting scale of individual growers was 1.01 ha, basically the same as India, but much lower than Brazil, Australia, Thailand and other large sugar producing countries (Fig.1-2).

Data source: official website of China Sugar Association (http://www.chinasugar.org.cn/). The same in Fig.2 and Fig.3.

Fig.2 Comparison of average planting scale in Guangxi and major sugarcane producing countries

Compared with other major sugarcane producing countries, Guangxi has less sugarcane planting area and small planting scale per household. The main reason is that the sugarcane area in Guangxi is small in land but large in population, and the farmland is scattered and can not be planted in a large area.

2.1.2

Comparison of sugarcane farmland conditions. According to the survey, Guangxi’ is scarce for sugarcane farmland, most of the slopes are dry, low in fertility, and low in organic matter content. The soil fertility is only 1/3 to 1/2 of that of the world’s major sugarcane producing countries. In the 767 000 ha designated sugarcane production protection areas, the slope of 6 to 15 degrees is about 201 000 ha, accounting for 26% of the total area of the protection area, and the irrigation area is about 335 000 ha, accounting for 43% of the total protection area. Guangxi’s sugarcane farmland has a poor resource endowment. More than 80% of it is planted on dry slopes and hilly lands, with large slopes, many stones, small fields and poor flatness, barren soil, and lack of infrastructure such as irrigation and drainage. Compared with other major sugar producing countries in the world, Guangxi has obvious disadvantages in terms of sugarcane farmland conditions.

2.1.3

Comparison of ratoon sugarcane cycle. The ratoon cycle of sugarcane in Thailand was 5 years; in Australia, it was 5-6 years; in Brazil, it was 5-7 years. Due to variety, planting management and other reasons, the average ratoon cycle of sugarcane in Guangxi was 3 years, which is 2-4 years shorter than that of Brazil, Australia, Thailand and other countries, as shown in Fig.3.

Fig.3 Comparison of ratoon cycle of sugarcane planting in Guangxi and major producing countries

Due to the short ratoon cycle, the sugarcane planting cost will increase accordingly, which is also a main reason for the high sugarcane planting cost in Guangxi. To reduce planting costs, it is necessary to promote improved varieties and strengthen the sugarcane planting management. This is the basis for increasing the yield and sucrose content of sugarcane. It is also an important factor in increasing sugarcane production, reducing costs and increasing efficiency, and increasing the income of sugarcane farmers.

2.2 Comparison of sugarcane planting costs

In the 2018-2019 crushing season, the sugarcane planting costs in Australia, India, Thailand, and Brazil were 114, 168, 230, and 236 yuan/t, respectively. In 2018, the planting costs of sugarcane in Guangxi was 411 yuan/t, which was much higher than that of major sugar producing countries in the world such as Australia, India, Thailand, and Brazil (Fig.4).

Data source: arranged according to the data provided by the National Sugar Industry Technology System of China and the data of Guangxi Autonomous Region Price Cost Survey Supervision and Inspection Bureau. The same in Fig.5

A large number of sugarcane grows on hillsides in Guangxi. The planting is discontinuous and the planting scale is small. The continuous and efficient operation of functional sugarcane harvesting is still rare. Plowing, weeding, eradication, and insecticide are basically done manually. In addition, the prices of chemical fertilizers and pesticides have increased year by year, which has also led to the high planting costs of sugarcane.

In 2018, the main components of sugarcane planting costs in Guangxi were material and service costs, labor costs and land rent. Specifically, the labor cost was 188 yuan/t, accounting for 45.76% of the total planting costs; the material and service costs were 167 yuan/t (mainly including the chemical fertilizers, pesticides, and mechanical operation), accounting for 40.65% of the total planting costs; the land cost was 56 yuan/t, accounting for 13.59% of the total planting costs. According to the data provided by the National Sugar Industry Technology System of China, in 2018-2019 crushing season, the sugarcane planting costs in Brazil: the labor cost was 13 yuan/t, accounting for 5.67% of the total planting costs; the material and service costs were 174 yuan/t, accounting for 73.89% of the total planting costs; the land cost was 48 yuan/t, accounting for 20.45% of the total planting costs (Fig.5).

Fig.5 Comparison of sugarcane planting costs between Guangxi and Brazil

The main difference of the sugarcane planting costs between Guangxi and Brazil is the labor cost. Therefore, reducing labor costs is the key to reducing planting costs. However, with the annual increase in chemical fertilizers and pesticides and other material and service costs, labor cost, and land rent, the sugarcane planting costs in Guangxi have been rising year by year, while the planting costs of major sugar-producing countries such as Brazil and Australia have basically remained unchanged, so that the sugarcane planting costs in Guangxi are much higher than that of other major producing countries in the world.

2.3 Comparison of the mechanization degree of sugarcane production

At present, in the process of sugarcane planting in Guangxi, the mechanization degree is seriously insufficient. Even if the degree of mechanization in each planting stage is included, it is still relatively low (about 42%). The planting mechanization of sugarcane area in Guangxi is mainly reflected in the planting process. The mechanization of the harvesting process is still difficult to promote. Only a few farms can achieve the mechanization of the sugarcane harvesting process. By contrast, the sugarcane production in Brazil and Australia has been fully mechanized from planting, harvesting, and transportation, thereby increasing labor productivity. Since sugarcane harvesting in Guangxi is mainly done manually, the current labor cost of sugarcane harvesting in Guangxi is as high as 120-180 yuan/t, accounting for 29% to 44% of the total sugarcane planting costs. If the whole process of mechanization is implemented in the links of cultivation, planting, management, and harvesting, it is expected that the sugarcane planting costs can be reduced by 90 yuan/t, which can save about 6 750 yuan/t.

2.4 Comparison of raw sugar production costs

The total raw sugar cost of the major sugar-producing countries in the world consists of three indicators: sugarcane costs, raw sugar processing costs, and logistics costs. The data of the 2014-2015 crushing season show that compared with other major sugar producing countries in the world, the total raw sugar production cost in Guangxi was the highest, reaching 4 735 yuan/t, and the lowest was Brazil (1 727 yuan/t), the difference between the two was up to 3 008 yuan/t (Table 1).

Table 1 Comparison of indicators for production costs between Guangxi and major sugar producing countries in 2014-2015

The sugarcane planting costs in Guangxi are too high, reaching 3 772 yuan/t, which is 2 837 yuan/t greater than the lowest in Brazil. The sugarcane planting costs in Guangxi and the operating cost of sugar enterprises remain high. The shrinking area of sugarcane planting and rising costs have led to fewer and fewer raw materials for sugar processing and higher production costs. Through the implementation of the "double high" (high yield and high sugar) base construction, the realization of the mechanization of sugar cane production can be accelerated, the sugarcane yield can be further increased, and the sugarcane production costs can be reduced.

3 Discussion and conclusions

In summary, compared with other major sugarcane producing countries, Guangxi’s sugarcane cultivation area is small, the average household planting scale is small, sugarcane planting cost is high, the degree of mechanization is seriously inadequate, raw sugar production cost is high. Guangxi sugarcane planting industry and even the whole sugarcane industry are facing a severe test. Therefore, Guangxi should attach great importance to improving sugarcane planting technology. On the basis of vigorously promoting the "double-high" cultivation technology, departments at all levels should adopt a combination of market mechanism and administrative measures to implement reasonable subsidies for sugar planting and increase farmers’ income. The sugarcane region of Guangxi should steadily promote the research of new varieties, and at the same time, on the basis of strengthening the promotion of improved varieties, develop and promote new varieties and new technologies for planted sugarcane.

It is recommended to take cultivating a new generation of fine varieties as the goal, select and promote high-yield, high-sugar, strong stress resistance, and new good ratooning sugarcane varieties, accelerate the integration of land resources and strengthen the construction of agricultural infrastructure on the basis of agricultural mechanization. Besides, it is recommended to improve the mechanization level of the harvesting process, further strengthen the research on sugarcane production machinery and the introduction and absorption of advanced sugarcane production mechanization technology, and introduce industry norms or local standards for sugarcane mechanization operations. With these measures, it is expected to reduce the production cost of sugarcane in Guangxi, and strengthen the competitiveness of Guangxi’s sugarcane industry in the world.