Buyers bet on higher supply from April on

During the first fortnight of March Brazilian crystal sugar prices kept increasing, boosted by low inventories. The CEPEA/ESALQ Index (Sao Paulo state) closed at 49.26 reals or 21.64 dollars per bag of 50 kilos on Mar 16th, up 5 percent in Real from Feb 27th. Buyers reduced purchases, betting on decreasing values with the product from the new crop from the second fortnight of April on.

Some mills have anticipated the 2009/10 sugarcane crop for this month in the Center-Southern region. In this period, they focus on the production of ethanol and VHP sugar (export). Unica data show from 15 to 20 new units this year, which should produce especially ethanol - the mix of production forecasted, for a while, at 43 percent for sugar and at 57 percent for the ethanol.

Regarding price parity calculated by Cepea, the sugar remunerated 94 percent more than the anhydrous ethanol between Mar 9th and 13th. In relation to the hydrated, the sugar advantage was of 107 percent in the same period. Domestic trades (Sao Paulo state) remunerated 11 percent more than exports. (Cepea - Brazil)


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