Index drops more than 10% in August

September, 5, 2017 – Crystal sugar quotes dropped sharply in the spot market of São Paulo State in August. Despite the lower volume of sugarcane crushed this crop, compared to the same period last season, mills allocated a higher amount of raw material to sugar production. Thus, supply increased in the spot market and prices dropped.

 

The CEPEA/ESALQ Index for crystal sugar dropped 10.52% in August, averaging 54.42 BRL per 50-kilo bag in the month, 11.05% lower than in July/17 (61.18 BRL per bag) and 35.44% below that in August/16 (84.29 BRL per 50-kilo bag) – values deflated by the IGP-DI from July/17.

 

Price drops in Brazil narrowed the gap between international and domestic quotes. Between August 28 and September 1, the CEPEA/ESALQ Index for crystal sugar averaged 52.65 BRL per bag, while the contract number 11 (October/17) averaged 52.68 BRL per bag. Thus, international sales remunerated only 0.05% more than sugar sales in the spot market of SP State in that period. Higher remuneration from international sales, even slight, had not been observed since late September/16. This figure considered weekly averages at 65.45 USD per ton of freight and charges, 66.50 USD per ton for quality premium and dollar at 3.1548 BRL.

 

According to Unica (Brazilian Sugarcane Industry Association), in the 2017/18 crop (until the first fortnight of August/17), mills from SP have crushed 206.133 million tons of sugarcane, 3.84% less than in the same period last season. Regarding sugar, plants from SP have produced 14.178 million tons, volume 4.24% larger than that in the same period last year. The production mix in that period was 55.65% for sugar and 44.35% for ethanol.

 

The ESALQ/BVMF Index of crystal sugar, which refers to the product at Santos port (no taxes; Icumsa color 150) including domestic sales and to export, decreased 9.66% in August, to 53.66 BRL (17.05 USD) per 50-kilo bag on August 31.

 

(Cepea-Brazil)

back

Contact

cepea@usp.br