Strait of Hormuz and Chinese Cane Sugar

Recently, the most watched hotspot is undoubtedly the sudden geopolitical event of "Iran closing the Strait of Hormuz". As a critical "choke point" for global energy and commodity shipping, the closure of the Strait of Hormuz directly impacts the transportation and pricing of global crude oil, fertilizers, and various import and export goods. Although the direct transportation route for sugar, a key agricultural import for China, does not pass through this strait, it will still be affected through multiple transmission mechanisms. This will create a chain reaction on the supply, demand, price, and import pattern of the domestic sugar market, and thereby indirectly influence the market layout and competitive landscape of the starch-based sugar industry.

Located between the Persian Gulf and the Gulf of Oman, the Strait of Hormuz is one of the world's most critical maritime passages. It sees an average daily transit of 19–21 million barrels of crude oil and refined products, accounting for 30%–31% of global seaborne crude oil and 18%–19% of total global supply. It is also a core export route for Middle Eastern fertilizers such as urea and phosphate, directly determining the stability of the global supply of energy and agricultural production materials. Should the strait be closed, global shipping fleets would be forced to reconfigure, leading to capacity shortages. The shipping costs for various bulk commodities would rise sharply, subsequently triggering cost pass-through effects throughout the global industrial chain.

For the starch-based sugar industry, this event presents both opportunities and challenges. The rise in sucrose prices creates substitution demand, offering starch-based sugar enterprises a chance to expand their market. However, rising energy costs and intensified market competition also place higher demands on these companies' cost control capabilities and product competitiveness.