The profitability of sugar exports from Brazil, the world’s biggest producer, over sales in the domestic market increased last week as harvesting delays helped boost international prices, according to Cepea.
Exports of the sweetener were 5.1 percent more advantageous than sales in the domestic market, according to the University of Sao Paulo research group. That compares with 0.7 percent in the prior week. Raw sugar traded on ICE Futures U.S. in New York climbed 4.8 percent in the two weeks ended June 15, while Cepea said the domestic price dropped 0.36 percent in the period. Rains in sugar cane growing areas have disrupted harvesting and delayed shipments.
“Players still say that the season is delayed, because of the late start of the harvesting and the slow pace of crushing activities, which were, in turn, halted by rains,” Heloisa Lee Burnquist, an analyst at Cepea, wrote in a report yesterday.
Sugar output in Brazil’s center south, the country’s main growing region, dropped 19 percent in the second half of May to 1.96 million metric tons after rain slowed harvesting, Unica said on June 14. The sugar content in the cane fell 5.8 percent in the same period to 119.53 kilograms (263.52 pounds) a ton, data from the industry group showed.
Crushing activities resumed in the state of Sao Paulo last week as the weather improved, Cepea said. Mills focused on delivering the sweetener from previously signed contracts, limiting supplies in the spot market, according to the report.
Rains are set to return to growing areas this week, with a cold front arriving in the center south either today or tomorrow, Marco Antonio dos Santos, an agronomist at weather forecaster Somar Meteorologia, said in a report yesterday.
Sales of sugar in Brazil’s domestic market last week were 25 percent more profitable than anhydrous ethanol, the kind used to blend into gasoline, and 46 percent more advantageous than hydrous ethanol, used in flex fuel cars. Both the sweetener and the biofuel are made from raw material sugar cane.