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By Maytaal Angel and Dominique Patton
LONDON/BEIJING, Jan 13 (Reuters) - Sugar traders in China, one of the world's top buyers of the sweetener, have sharply cut their overseas purchases as their import profits dry up and excess sugar piles up in the country's bonded warehouses.
China likely imported nearly 5.5 million tonnes of raw sugar last year, market sources say, around 2 million tonnes more than a year earlier and much of it surplus to the country's consumption requirements.
The surplus, they say, has piled up in bonded warehouses and will take some time to work off, with lower imports likely this year overall and very few orders expected this quarter - a move that could cap global raw sugar prices.
"The profit from importing sugar into China as of today is negligible on the nearby months. In April and May last year it was over $200 a tonne, so too much sugar came in," said Marex Spectron analyst Robin Shaw.
"We think roughly 1.5 to 2.0 mln tonnes is sitting in bonded warehouses," he added.
China eclipsed Indonesia last year to become the world's biggest sugar importer.
It imported 4.4 million tonnes of raw sugar in the first 11 months versus 2.7 million in the year earlier period, customs data shows, but sources say another 1 million tonnes or so arrived in December.
A Hong Kong-based sugar trader said China will likely start importing in significant quantities only in April, adding that overall imports for the year will likely be about 1 million tonnes less than last year.
The global market trades about 36 million tonnes of raw sugar a year, according to the International Sugar Organization, and 1 million tonnes less buying from China can impact world prices.
Also driving down Chinese sugar imports is uncertainty over the government's new import policy, which was expected to result in more liberalised rules but has yet to deliver them in practice.
Sources say much of the stock in bonded warehouses has yet to be issued with an import licence, deterring traders from ordering in more sugar for now.
Global raw sugar prices gained 15% last year, boosted in part by the ramp up in Chinese buying. (Additional reporting by Hallie Gu. Editing by Nigel Hunt and David Evans)