China launches probe into sugar imports as trade tensions mount

[BEIJING] China has launched a probe into soaring sugar imports following complaints by its domestic industry, the government said on Thursday, the latest sign that trade tensions between major commodities producing nations is intensifying.

The Ministry of Commerce said the probe will look at imports since 2011 and into possible protectionist measures provided by foreign countries for their producers. It will last six months, with an option to extend the deadline, it said.

The government did not say which countries it would target as part of the probe. Thailand, Brazil and India are the world's largest sugar producers and China is the world's top buyer.

The move follows years of lobbying by the domestic industry as mills have struggled with rising farming costs, particularly the high local sugar price which is set by the government.

This year though, business conditions have improved with a resurgence in global refined sugar prices and imports of sweetener have fallen.

The investigation also comes a week after the United States filed a challenge with the World Trade Organisation over Beijing's price supports for its grain farmers.

Over the past year, Europe and the United States have accused China of exporting its excess aluminium and steel production, hurting the global industry and pressuring global prices.

REUTERS