Stable prices, but still negative basis

Brazilian sugar prices kept stable last days. On Monday, Oct 15th, the CEPEA/ESALQ Index for crystal sugar (Sao Paulo state) closed at 23.94 reals or 13.19 dollars per bag of 50 kilos, down slight 0.2 percent in Real over the previous Monday, Oct 8th.

Even with the stability, the bases are still negative. Besides the forecasts for high global sugar supply, the valuation of the Real against the dollar keeps resulting in better remuneration of the domestic trades over exports. It is worth highlighting that some mills, in need of cash, should offer a larger volume of the product, pressuring the prices down in the next weeks.

Regarding the Brazilian production, until Sept 16th, the sugarcane volume processed in the Center-Southern region totaled 288.9 million tons, 70.5 percent of the total expected for the 2007/08 crop in that region and 8 percent higher than the volume processed in the same period 2006 - according to the Unica (Sao Paulo Sugar Cane Agroindustry Union) forecasts.

According to the Secex (Foreign Trade Secretariat), Brazilian sugar exports totaled 1.89 million tons in September, volume 26 percent higher from the same period 2006 (1.5 million), but 14 percent inferior to the August this year.

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