Domestic sugar prices kept firm during August, even with harvest peak in the Center-Southern region, which produces almost 90 percent of the Brazilian sugar and ethanol production. The CEPEA/ESALQ Index for crystal sugar (Sao Paulo state) increased 5.9 percent in Real from July 31st to August 29th, closing at 29.94 reals or 18.33 dollars per bag of 50 kilos.
The forecast of deficit in the next global sugarcane crop is the main reason to justify mills' retreat in Brazil - they are betting on higher values. Other mills limit the volume available in the spot market, due to the contracts settled previously.
According to the Sao Paulo Sugar Cane Agroindustry Union (Unica), from April this year (2008/09 crop beginning) until the first fortnight of August, 244.15 million tons of sugarcane were already processed in the Center-Southern region, which represents increase of 8.47 percent compared to the same period of the previous season. Even though, the sugar production is 5.15 percent inferior, totaling 12.47 million tons between April and August. The harvesting should be concluded in November/December. It will depend on the rains in that period. (Cepea - Brazil)