Brazil’s sugar exports to China are set to recover
Feb, 04, 2019 Posted by datamarnewsWeek 201906
In 2018, Brazil saw impressive growth in sugar exports, up 132% to 790,000 tons year-on-year, equivalent to US$217m in export revenue, according to Secex data. However, the figures are much lower compared to the annual average between 2011 and 2016, down 95%. One of the highest volumes ever recorded was in 2013, at 3.5m tons.
The reduction in Brazil’s sugar exports to China has occurred in the last two years. Especially in the first quarter of 2018 when the country only shipped 56,000 tons to China. High import duties of 95% rendered the Brazilian commodity practically unviable in the Chinese market, after paying logistics costs. However, in the second semester of last year, the Asian country reduced the tariff on Brazil and imposed tariffs on sugar from other producing countries.
A combination of a more level international playing field, lower production costs and the high quality of Brazilian sugar has meant Brazilian sugar enjoyed a competitive advantage over sugar from other countries for the second half of 2018. If China does not alter the present scenario of import taxes, Brazilian sugar has a fair chance of recovery this year.
Although Brazilian sugar improved in the Chinese market, the country’s overall sugar shipments fell to 21m tons in 2018, compared to 29m tons in 2017. Brazil’s sugar output reached a 10-year low between April 1 and November 16, down 27% to 25.13m tons YoY. DataLiner shows Brazil’s 10-year maritime sugar exports trend to China and the rest of the world, as follows:
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