Brazilian sugar exports decrease

The volume of sugar exports at Brazilian ports in July will be the lowest in the last five years, with mills no longer exporting sugar amid falling global prices.

According to the navigational agency Williams, only 745,000 tons of sugar were loaded on ships in Brazilian ports in the first half of July, 28% less than in the same period last year, when production had already been reduced.

The volume is 63% lower than in July 2017, when it had a normal production volume (see table below).

In warehouses 20 and 21, operated by Copersucar, two vessels will carry 130,000 tons of soy. At the terminal operated by Rumo, a Cosan-controlled logistics company that has a 50% stake in the leader in sugar production Raízen, 10 ships are expected to be loaded with corn.

“Global demand for sugar has not fallen, it has even increased a little,” says Julio Maria Borges, sugar and ethanol consultant for JOB Economia. “But there is a lot of competition out there. Brazilian mills would have to sell very cheap to make volume, and they don’t want to do that,” he said.

The Brazilian currency, which has increased by almost 10% in value against the dollar since May, further reduced the incentive for sugar exports.

“Many mills continue to focus on ethanol, which generates quick cash,” says João Paulo Botelho, an alcohol and ethanol analyst at INTL FCStone. “They will wait for better prices to make and export sugar.”

Expectations for higher sugar production in Brazil’s current south-central sugarcane crop have not been met.

The share of sugar and ethanol production from sugarcane remains very similar to last year, when mills allocated 36% of sugarcane to sugar production, a record value, with everything else going to ethanol.

According to Única, Union of Sugarcane Agroindustry of the State of São Paulo, in this season the participation of sugar in sugarcane production was only 34.7%.

Sugar Production in Brazil from July 1st to 15th

The following DataLIner chart shows Brazilian sugar export trends since January 2015:

Source: Williams Shipping Agency

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