Cepea, July 2 2019 – Prices of crystal sugar dropped sharply in June. The dry weather in São Paulo state favored both the harvest and the processing of sugarcane. As a result, mills in São Paulo increased the supply in the spot market, despite the higher ethanol production. The demand, in turn, was slightly higher, but not enough to push up quotes.
In June/19, the CEPEA/ESALQ Index (São Paulo State) for crystal sugar averaged 62.55 BRL per 50-kilo bag, 9.48% lower than that in May/19 (69.10 BRL per bag), but still higher than that in June/18 (60.90 BRL per bag), in real terms – values were deflated by IGP-DI May/19. Average prices have been higher than those observed last year since April/19, official beginning of the crop.
According to Unica, in the accumulated of the 2019/20 (from April to the first fortnight of June), the sugar production in São Paulo state amounted 4.621 million tons, 13.53% smaller compared to that in the same period last year. From the total cane crushed, of 99.563 million tons, 40.18% were allocated to sugar production and 59.82%, to ethanol.
In the international market, demerara sugar quotes remained moving down at ICE Futures (New York Stock Exchange) in late June. However, unfavorable weather conditions may affect sugarcane crops in Asia, mainly in India, where rains delayed. As a result, the decrease of the production may underpin quotes in the international market.