Even in harvest time, Brazilian sugar prices kept moving up during the first fortnight of August. Between July 31st and August 15th, the CEPEA/ESALQ Index (Sao Paulo state) increased 1.7 percent in Real, closing at 28.75 reals or 17.55 dollars per bag of 50 kilos on Aug 15th. From the harvest beginning (April) until now (harvest peak), the Index accumulates slight increase of 1.6 percent.
According to the Sao Paulo Sugar Cane Agroindustry Union (Unica), harvesting activities of the 2008/09 crop were intensified in the first fortnight of July, helped by the drought in Sao Paulo state. Of the 176.36 million of tons of sugarcane processed (5.72 percent more than in the same period of 2007/08 crop), 8.48 million tons of sugar (decrease of 10.78 percent) and 7.94 billion liters of ethanol (increase of 9.31 percent) were produced.
The support keeps coming from the low supply in the domestic market. The positive bases in the international market also contributed to boost the values in Brazil. The Czarnikow forecasted a global deficit of 3.3 million tons of sugar in 2008/09, after a 9.4 million surplus in 2007/08. The decrease is linked to the lower sugar production in India and Europe.
Regarding the price parity calculated by Cepea, the anhydrous ethanol remunerated 1 percent more than the sugar from Aug 11th to 15th. In relation to the hydrated, the sugar remunerated 11 percent more. In the same period, the domestic trades (Sao Paulo state) remunerated 6 percent more than exports, according to the Cepea. (Cepea - Brazil)