Cepea, August 5 2019 – Crystal sugar prices dropped in the spot market of São Paulo State in July, despite the lower production in the 2019/20 crop. The current price levels are appealing to purchasers, who traded larger amounts in the spot during the month. Although the agents from some refineries were out of the market, producing sugar only to accomplish contracts, the volume available was enough to meet demands.
Between June 28 and July 31, the CEPEA/ESALQ Index for crystal sugar dropped 4.5%, closing at 58.66 BRL (15.44 USD) per 50-kilo bag on July 31.
According to Unica (Brazilian Sugarcane Industry Association), in the first fortnight of July/19, the refineries from SP produced 1.302 million tons of sugar, 21.22% down compared to that in the same period last year. In the 2019/20 crop (April/19 to July 16 2019), production has decreased 13% compared to that in the same period last season – the amount of sugar produced in SP in the current crop is at 7.47 million tons.
For the international market, Datagro (independent agricultural consultancy) estimates a sugar deficit at 6.42 million tons in the next 2019/20 global season, which starts in October/19. Weather issues may damage sugarcane crops in India, Europe, Australia, Pakistan and Thailand. In the short-term, however, the supplies from India and Thailand are high, constraining sharper price rises in the international market.
EXPORTS – Brazilian sugar exports were lower in the first quarter of the 2019/20 crop. According to Secex, from April to June/19, shipments totaled 4.554 million tons, 9.7% down compared to that in the same period last season (April to June/18), at 5.044 million tons. Among the countries that imported sugar in that period are Algeria, in first place, which imported 582 thousand tons, followed by China (572 thousand tons), Saudi Arabia (361 thousand tons), Nigeria (344 thousand tons), Bangladesh (312 thousand tons) and the United Arab Emirates (295 thousand tons), still according to Secex.