Cepea, May 20, 2020 – The volume of crystal sugar traded in the spot market of São Paulo State increased slightly in the first fortnight of May. Gradually, refineries resumed production, trying to close new deals for prompt-delivery. By May 15, all the refineries from SP State had been crushing the sugarcane from the 2020/21 crop, and processing plants were producing more sugar than they did last season.
In general, the low demand for fuel (because of the social distancing advice, due to the coronavirus pandemic) and the strong dollar against Real may lead refineries to allocate more sugarcane to sugar production, boosting Brazilian sugar exports. According to the USDA (São Paulo office), in the 2020/21 business year, Brazil should export 28.85 million tons of sugar, 33% more than that in the 2019/20 cycle (1.93 million tons).
PRICES – Cepea calculations show that crystal sugar exports remunerated more than sales in the spot market of São Paulo State in the first fortnight of May. This scenario, which was primarily underpinned by the strong dollar, could have pushed up prices in the Brazilian market, as refineries have been allocating higher volumes of the product for exports, lowering domestic supply. However, demand continued weak in the spot market of SP, and the CEPEA/ESALQ Index for crystal sugar (Icumsa 130-180 – São Paulo) dropped to around 73 BRL/bag on May 15.
Between May 4 and 15, the CEPEA/ESALQ Index averaged 74.61 BRL (12.92 USD)/50-kilo bag, 4.5% down compared to that in the first half of April.
EXPORTS – According to Secex, in April, Brazil exported 1.554 million tons of sugar, 9.66% more than that shipped in March (1.417 million tons) and 27.51% above that from April/19 (1.219 million tons). Revenue from exports last month totaled 475.054 million USD, 11.83% higher than that from March (424.794 million USD). Among the top importers of the Brazilian sugar in April/2020 were Bangladesh (284 thousand tons), Algeria (193 thousand tons), Morocco (129 thousand tons), Saudi Arabia (123 thousand tons) and Indonesia (117 thousand tons).