Sugar prices in top producer Brazil fell to the lowest average during this year’s harvesting period since the 2009-10 season because of ample supply, according to Cepea, a University of Sao Paulo research group.
Crystal sugar, which accounts for 68 percent of all the sweetener sold in the South American nation, averaged 54.22 reais ($26.47) in real terms per 50-kilogram (110-pound) bag from April to Dec. 21, Cepea said in a report dated yesterday. That’s a decline of 21 percent from the 68.66 reais a bag in the same period in 2011. In 2010, the average was 66.62 reais a bag, data from the group showed.
“The major cause for the lower level of sugar prices through this harvest year is the relatively abundant production obtained both in the center-south Brazil as in other world producers,” Heloisa Lee Burnquist, an analyst at Cepea, wrote in the report. Center south is Brazil’s biggest growing area.
Center south output will be a record 34.05 million metric tons in 2012-13, up from a previous forecast of 32.7 million tons, according to industry group Unica. Global sugar supplies will be 7.8 million tons higher than consumption, London-based Czarnikow Group Ltd. said on Dec. 19. That’s an increase of 9.9 percent from its previous forecast.
Rainfall that delayed the start of the center south harvest helped increase the quality of the cane, Burnquist said. Drier weather from July to December has meant that mills were able to extend the harvesting period and process higher than expected cane production.
Crystal sugar has an International Commission for Uniform Methods of Sugar Analysis level of between 130 and 180, according to the Cepea website. A lower level corresponds to a higher degree of whiteness. Refined sweetener traded in London on NYSE Liffe calls for an ICUMSA level of 45.
Raw sugar for March delivery rose 0.5 percent to 19.15 cents a pound by 5:25 a.m. on ICE Futures U.S. in New York. The commodity has fallen 18 percent so far this year.