Recently, the National Development and Reform Commission ("NDRC") has issued the Administrative Measures for Central Sugar Reserve (Draft for Comment) (the "Draft for Comment") to solicit comments from the public by October 16, 2020.
The Draft for Comment comprises 36 articles, divided into eight chapters. Among them, Chapter III Plan Management, including eight articles, stipulates the proposal and determination processes of collection, sales, rotation and use plans of central sugar reserve, as well as operation methods. Chapter V Quality Management, including three articles, specifies quality requirements, quality inspection and monitoring requirements, etc. Pursuant to the Draft for Comment, central sugar reserve shall, in principle, be subject to balanced rotation. Annual rotated raw sugar quantity shall be controlled by 15-20%, and it can be properly increased or decreased as per market regulation needs, and in principle, does not exceed 30% of total inventory; in principle, white granulated sugar shall be rotated once a year. The Draft for Comment also stipulates that, for the rotation of central sugar reserve, COFCO Group generally considers factors such as the storage quality and years of central sugar reserve and management conditions of storage enterprises, and puts forward recommendations for the next year's rotation plan before the end of November every year, and submits it to the National Food and Strategic Reserves Administration ("NFSRA"), the Ministry of Finance ("MOF") and the NDRC.