Despite higher production, Index sets a nominal record in 2020

Cepea, January 4, 2021 – In spite of the higher sugar production in the 2020/21 season, the CEPEA/ESALQ Index for crystal sugar (São Paulo State) set a nominal record in early November 2020, surpassing 100 BRL per 50-kilo bag. On the following days, the record was renewed, and the Index hit 111.96 BRL/bag on December 10, 2020.


From April to December/2020 (up to Dec. 20), the CEPEA/ESALQ Index for crystal sugar (SP) averaged 94.66 BRL per 50-kilo bag, 16.61% up compared to that registered in the season before (81.18 BRL/bag between April and December/19), in real terms – IGP-DI from November/20.


In March, when the covid-19 pandemic began to increase in Brazil, sugar mills in São Paulo State were starting to crush the sugarcane from the 2020/21 season. With the social distancing measures in late March, ethanol sales were expected to decrease. Besides, uncertainties about the effects of the pandemic on the economy pushed up the dollar, which surpassed 5.00 BRL. This scenario led the mills in SP to allocate higher volumes of sugarcane to sugar production, since exports became more attractive than domestic sales – in the two previous seasons, the production mix was higher to ethanol in SP.


According to Unica (Brazilian Sugarcane Industry Association), from April/20 to November/20, sugar mills in SP produced 26.235 million tons of sugar, a staggering 43.13% up from that in the same period of 2019. Still according to Unica, 53.07% of the total sugarcane crushed (354.187 million tons) was allocated to sugar production, and 46.93%, to ethanol production.


Brazilian sugar exports were high in 2020, which was the main reason for the valuations in the market of São Paulo.


According to data from Secex (Foreign Trade Secretariat), from January to November, Brazil exported 27.984 million tons of sugar, 56.44% up from the total volume exported in 2019 (17.889 million tons). It is probable that the volume exported in 2020 surpasses the record set in 2016, when 28.93 million tons were shipped to the international market.




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