Brazilian sugar exports more than double in September compared to year-ago levels

2020 has been a particularly good year for Brazilian sugar exports. Data from the Department of Trade and International Relations of the Ministry of Agriculture, Livestock, and Supply (MAPA) show that exports of raw sugarcane more than doubled in September 2020 compared to the same month of 2019, with sales increasing from US$ 420.4 million (in September 2019) to US$ 888.4 million, an increase of 111.3%. According to the agency, the drop in sugar production in India and Thailand in this 2020 harvest permitted the increase in Brazilian exports.

The report by the United States Department of Agriculture – USDA – pointed out that Brazilian sugar exports should reach a record 32 million tons in 2020/21, an increase of 66% in relation to the previous year.

According to the USDA, this advance is due to the country’s large exportable sugar surplus and the steady demand from countries that import the Brazilian sweetener. In 2019/20, shipments were estimated at 19.3 million tons. “Despite the Covid-19 pandemic and logistical obstacles at ports, including long waiting times for loading, the significant devaluation of the real against the dollar kept the Brazilian product competitive,” states the report.

Brazilian Sugar Exports | Jan 2017 to Aug 2020 | WTMT

Source: DataLiner (To request a DataLiner demo click here)

 

Ports and destinations

The Port of Santos continues to lead Brazilian sugar exports in 2020, handling 81.79% of the sugar volume exported this year. With the increase in sweetener exports, the port experienced some congestion. Data from the shipping agency Cargonave show that the average waiting time for loading sugar ships at Rumo, the main export terminal at the Port of Santos, reached 45 days, as calculated on June 14.

Some solutions were adopted to overcome these logistical problems. In October, for example, the company Évolus Logística coordinated a break-bulk operation to export sugar via the Port of Santos on the ship MV Lady Cansen which sailed for West Africa with 25 thousand tons of the product. A sugar break-bulk had not left Santos for more than a decade, with the popularization of containers. The practice is common in the port of Rio de Janeiro, but not in Santos.

Another solution was to return to using the Port of São Sebastião on the north coast of São Paulo to carry out sugar transport operations after a hiatus of 15 years. The resumption took place in May with the shipment of 15 thousand tons of sugar destined for Gambia, in Africa, through a closed agreement with Raízen.

Main Brazilian Sugar Export Ports (HS 1701) | Jan to Aug 2020 | WTMT

Source: DataLiner

 

Brazilian Sugar Exports (HS 1701) by Type of Cargo | Jan to Aug 2020 | WTMT

Source: DataLiner

 

Destinations

China was the main destination for Brazilian sugar in 2020, importing 12.7% of the total amount exported between January and August 2020. As a result, in June, Brazil returned to being the main supplier of sugar to the Asian country, accounting for more than 60% of imports, according to data from the China General Customs Administration (GACC).

Until 2016, China was the largest market for Brazilian sugar abroad, with purchases that reached 2.5 million tons per harvest. In 2017, however, Beijing imposed a surcharge on the entry of the Brazilian product to protect its domestic production; this slowed sales. In the 2017/18 cycle, with the barrier already in place, the volume dropped to 115 thousand tons.

Later, the Chinese also restricted the entry of sugar into their market from low-producing countries. Brazil, the most competitive market in the world, once again increased its exports to China, but still not at the same levels as before.

This year, Brazil canceled a complaint it had filed with the World Trade Organization (WTO) and avoided opening an investigation committee against China because of the surcharge because Beijing pledged not to extend it beyond May 2020. Thus, the rate outside the quota, which was 85%, was back to 50%.

As a result, Chinese imports of Brazilian sugar that totaled just 145,300 tons between January and May, jumped in June. The volume exported in June was 239,400 tons, an increase of 477% in relation to the same month of last year. Below are the main destinations for Brazilian sugar in 2020:

Main Destinations for Brazilian Sugar Exports (HS 1701) | Jan to Aug 2020 | WTMT

Source: DataLiner

 

Types of sugar

Regarding the main types of sugar imported, raw sugar accounts for 65% of the total exported. See the graph below to find the share percentage of each type of sugar in the total exported by Brazil. This segregation by type of sugar is a new DataLiner data field, available through dashboards:

Brazilian Exports by Type of Sugar (HS 1701) | Jan to Aug 2020 | WTKG

Source: DataLiner (To request a DataLiner demo click here)

 

Projections

For the next harvest (2021/22), the consulting firm Datagro estimates that the production of Brazilian sugar will be slightly lower than in the current season, as a result of the recent years’ dry climates having an effect on the plantation productivity.

For national production, the firm forecasts a 4.8% reduction in production compared to the current harvest, a decrease of 2 million tons, for a total of 39.65 million tons. The Brazilian sugarcane harvest is estimated to be 630 million tons, 3.3% less than projected for the current harvest.

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