Supply presses prices down in the 07/08 crop

The Brazilian 2007/08 sugarcane crop was not positive over the previous season, in terms of prices. The year of 2007 was marked by stable values, at lower levels compared to the 2006/07 crop. The demand increased, but the supply enlarged even more.

According to the Sao Paulo Sugar Cane Agroindustry Union (Unica), until Dec 1st, it was processed 425 million tons of sugarcane in the Center-Southern region, increasing 52.3 million tons over the previous crop. The ethanol production in this region totaled 19.7 billion liter, enlarging 3.7 billion liters.

The result was lower prices over 2006. From April until November this year, the monthly CEPEA/ESALQ Index for anhydrous averaged 0.76045 real or 0.3981 dollar per liter (excluding taxes), 18.5 percent in Real inferior to that of the same period last crop - in nominal terms. For the hydrated, the Index averaged 0.65834 real or 0.3447 dollar per liter (excluding taxes), decreasing 21.3 percent in Real. The higher percentage allotted to the ethanol also reinforced the downward trend.

Regarding the international market, the dollar depreciation reduced the revenues. Between January and November this year, exports totaled 1.380 billion dollars, value 6.48 percent lower over the same period 2006. The volume exported, however, amounted to 3.289 billion liters, increasing 4.6 percent over the last year.


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