With lower supply in the Brazilian market, sugar prices rise in August

Cepea, September 3, 2020 – Prices for the crystal sugar traded in the spot market of São Paulo State continued on the rise in August. In the last week of the month, refineries reduced the volume available for sales in the domestic market even more, and, thus, prices hit 85 BRL per 50-kilo bag. As sugar production has been higher, the fast exports pace is the main reason for this valuation.


On August 31, the CEPEA/ESALQ Index for crystal sugar (São Paulo State) closed at 85.13 BRL/bag (15.55 USD/bag), 8.5% up compared to that on July 31.


According to Unica, from April/20 to the first fortnight of August/20, the refineries from SP crushed 224.485 million tons of sugarcane, 9.15% up compared to that in the same period last year. Sugar production totaled 15.825 million tons, 48.03% up in the same period. Of the total volume of sugarcane processed, 53.38% were allocated to sugar production and 46.62%, to ethanol production.


In the last week of August, the valuation of crystal sugar in the Brazilian market resulted in a slight advantage over exports. It is worth to mention that, since early August, exports had been remunerating more than sales in the domestic market.


Between August 24 and 28, the weekly average of the CEPEA/ESALQ Index for crystal sugar was 83.90 BRL (15.14 USD/bag) per 50-kilo bag, while the October/20 contract at ICE Futures was 83.52 BRL per bag. Thus, sales in the spot market of SP State remunerated 0.46% more than exports did. This figure considered weekly averages at 40.75 USD per ton of freight and charges, 41.60 USD per ton for quality premium and dollar at 5.5402 BRL.





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