Liquidity decreases in the 2nd half of June, and Index ends the month stable

Cepea, July 2, 2020 – Crystal sugar prices oscillated between 74 and 76.00 BRL/bag in June, ending the month stable compared to that in late May. The dollar appreciation against Real most of the month favored Brazilian sugar exports, reducing supply in the Brazilian market. Thus, the trading pace for crystal sugar in the spot market of SP was faster in the first fortnight, and purchasers were buying larger amounts. Agents from refineries were mostly unwilling to lower asking prices, agreeing to do so when larger volumes were purchased.


With the dollar appreciation against Real, Cepea calculations showed that, in the second fortnight of the month, the Brazilian exports of crystal sugar resumed remunerating more than sales in the spot market of São Paulo State. It is worth to mention that, in the first fortnight of June, domestic sales were remunerating more than exports were.


In the second half of June, the trading pace for the commodity slowed down in the spot market of São Paulo State, and lower volumes were sold. Purchasers seemed to have sugar stocked from the acquisitions in the first half of the month.


Demand may have been pressed down by the price drops for demerara sugar at the New York Stock Exchange (ICE Futures), which may discourage exports and increase crystal sugar supply in the Brazilian market.


On June 30, the CEPEA/ESALQ Index for crystal sugar (São Paulo State) closed at 76.12 BRL (13.99 USD/bag) per 50-kilo bag, 0.87% down compared to that on May 29.


CROPS – The dry weather in June favored the harvesting of the 2020/21 sugarcane crop in São Paulo State. According to Unica (Brazilian Sugarcane Industry Association), from April to the first fortnight of June, the refineries from São Paulo crushed 114.905 million tons of sugarcane, 14.47% more than that in the same period last year. Sugar production tends to be higher than ethanol production this season – 51.53% of the sugarcane has been allocated to sugar production in São Paulo. So far, 7.364 million tons have been produced, 58.74% more than that in the same period last year.




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