Supply rises 11 percent and demand, 47.5 percent

The 2006/07 Brazilian sugarcane crop, which has already finished, brings new figures to the market in terms of supply, demand and prices, especially in the Sao Paulo state.

More mills offered the product. According to the Unica (Sugar Cane Industry Union), the volume of cane processed enlarged 10.1 percent in the Center- Southerner region. It was processed 371 million tons, producing 25.8 million tons of sugar and 15.9 billion liter of ethanol. The increase of sugar supply was of 17 percent and of ethanol, 11.2 percent over the previous crop.

Regarding the domestic demand, the hydrated ethanol sells increased expressively in 2006. According to the National Petroleum Agency (ANP), in December, distributors traded 45.7 percent more ethanol in the Sao Paulo state in relation to Dec/05.

Ethanol prices, even with short variations during the crop (from April/06 to February/07), were higher than those practiced on the previous crop. For the hydrated, in Sao Paulo state, the average was of 0.83428 real per liter (excluding taxes) until February, value 0.62 percent superior to the previous crop. For anhydrous, the price is 3.5 percent higher, at 0.93538 real per liter (excluding taxes).

These numbers confirm the positive outlook of the sugarcane market during the last crop, bringing news expectancies to the beginning of the next process (the 2007/08 crop), scheduled to the end of this month in some mills.

Last week, the CEPEA/ESALQ Index of anhydrous upped 0.99 percent, averaging 0.84568 real or 0.39591 dollar per liter (excluding taxes). The hydrated valuated 0.84 percent, to 0.81791 real or 0.38344 dollar per liter (excluding taxes).

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