UPDATE 1 – China will expand its list of countries for sugar import tariffs from August 1 | Agricultural products

* All non-quota sugars are subject to 90% duty

* Movement follows several months of losses in local mills

* Government action surprised trade (Adds detail )

By Dominique Patton and Hallie Gu

BEIJING, July 16 (Reuters) – China will levy additional duties on over-quota sugar imports of all origins as of August 1, the Ministry of Commerce announced on Monday , a little over a year after heavy penalties on the top producers, including Brazil and Thailand.

In May of last year, the government hit the major exporting countries with penalties on sugar shipments after years of lobbying by domestic factories. It still exempts 190 small producing countries and regions, mainly in South-East Asia and South America, as well as in the Philippines and El Salvador.

The list of exempted countries was canceled, said the Ministry of Commerce in a statement released Monday. "Protection measures will be uniformly applied to all over-quota sugar imports," he added.

China authorizes 1.94 million tonnes of sugar imports per year at a rate of 15 percent as part of its commitments to the World Trade Organization. Shipments outside this exemption – out-of-quota imports – are subject to a higher tariff and require special permits. The price of Chinese sugar plummeted this year, pushing most producers into the red and threatening China's efforts to support millions of small farmers in the poor region of southern Guangxi and neighboring Yunnan Province

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Industry representatives recently called on the government to "tighten" supplies from international markets, while growing fears that large global stocks will lead to more smuggling into China.

Nevertheless, China's decision surprised most traders, who did not expect a quick response from the government.

"We were expecting them to act but not so fast," said a sugar trader with a Shanghai-based international trading house.

Chinese white sugar futures hit a low of 4,797 yuan ($ 717.63) a tonne last week, a level not seen since 2009, and are currently at their lowest level ever four years.

The costs of production, however, rise to 6000 yuan per ton for many mills, according to the international house trader.

Out-of-quota imports are subject to a 50 per cent tax and protective measures added an additional 45 per cent duty to these imports last year, bringing the total to 95 per cent . This should fall to 90% this year and 85% next year.

Chinese importers have sharply reduced shipments of the main Brazilian supplier since the introduction of tariffs last year. The nation has also boosted shipments of small producers, some of whom have exported to China for the first time.