Product remunerates 22 percent more than hydrated

Since the beginning of April, Brazilian sugar prices have been decreasing. Besides the product from the new crop (harvest activities are moving on), the expectative of global surplus this season also keeps pressuring values down. Buyers, in turn, keep retreated, trading few volumes.

Even with the downward trend, the product is still remunerating 22 percent more than the hydrated ethanol and 4 percent more than the anhydrous. That is because ethanol decreases were stronger. Comparing the last week with the end of April, the anhydrous dropped 29 percent and the hydrated, 33.7 percent, in mills of Sao Paulo state, which produces more than 60 percent of the Brazilian sugarcane production.

The CEPEA/ESALQ Index for crystal sugar (Sao Paulo state) closed at 26.53 reals or 13.82 dollars per bag of 50 kilos on Thursday, May 31st, down 17.5 percent over the Apr 30th. The devaluation was not even higher because several mills keep focused on the ethanol or VHP sugar production. Moreover, the process has been moving at a slow pace and some mills started the production with delay. According to the Unica (Sao Paulo Sugar Cane Industry Union), until May 22nd, 206 mills of the Center-Southerner region started to harvest the 2007/08 crop.

Regarding price parity calculated by Cepea, exports returned to remunerate more than the domestic trades (7 percent) during the last week (from May 21st to May 25th). The advantage was related to the higher international values, the lower exchange rate and the decreasing domestic prices.


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