Some mills transform sugar in ethanol

Since the beginning of November, the crystal sugar has been less advantageous than the ethanol (anhydrous and hydrated) in Sao Paulo state. This scenario is related to the increasing fuel prices, since sugar values keeps stable.

Between Nov 26th and 30th, the anhydrous remunerated 24 percent more than the sugar, and the hydrated 18 percent. The sugar disadvantage over the ethanol has been stimulated some industries transforming sugar in ethanol - it is unusual. Regarding price parity, domestic trades (SP market) remunerated 5 percent more than exports in the same period.

Brazilian sugar prices have been keeping at around 23.50 reals or 13.00 dollars per bag of 50 kilos for more than one month - near to the cost of production, according some mills. On Nov 30th, the CEPEA/ESALQ Index for crystal (Sao Paulo state) averaged 23.30 reals or 12.99 dollars per bag, down slight 0.68 percent in Real over Oct 31st. Not even the higher demand has raised prices expressively. The reason is the high supply. Some mills offered a larger volume, due to the necessities of cash and of reducing stocks in this end of crop.

The International Sugar Organization (ISO) increased its forecast about the surplus global sugar production in the 2007/08 crop, from 10.8 to 11.14 million tons. Regarding the 2008/09 crop, the Organization estimates a deficit of the product, due to the lower supply in some countries like India and those of European Union.

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