Cepea, September 17th, 2021 – Crystal sugar prices continued to rise in the spot market of São Paulo State (SP) in the first fortnight of September, surpassing 142.00 BRL per 50-kilo bag. The upward trend of prices is majorly linked to the low supply of crystal sugar in the spot, which is a reflex of the lower harvest and productivity of sugarcane crops in Brazil because of the drought and frosts that damaged crops in the 2021/22 season. As regards demand, uncertainties about the domestic availability of sugar are leading purchasers to pay higher prices for the product in the spot.
It is important to highlight that most sugar mills in SP are supposed to end sugarcane crushing in October. Besides, the strong dollar compared to the Real continued to encourage Brazilian sugar exports.
Between August 31 and September 15, the CEPEA/ESALQ Index for crystal sugar increased by 2.9%, closing at 142.63 BRL (27.04 USD)/50-kilo bag on Sept. 15.
As for production, according to Unica (Brazilian Sugarcane Industry Association), this season (April/21 – second half of August), SP has produced 227.41 million tons of sugarcane, 9.51% less than that in the same period last season. In the same comparison, sugar production totaled 16.31 million tons, a decrease of 9.34%.
EXPORTS – According to data from Secex (Foreign Trade Secretariat), Brazil exported 2.6 million tons of sugar in August/21, 18.7% less than that in August 2020 (3.1 million tons).
Globally, estimates point to an increase of 2.6% in the sugar volume exported, at 39 million tons, according to information from Global Trade. Lower exports from Brazil, the number one sugar-exporting country in the world, are supposed to be offset by supply from other countries, such as Thailand, whose production is expected to be 39% higher, at 25 million tons. The output from India is expected to increase too, by 3%, to 36 million tons.