Sugar sales within Brazil, the world’s largest producer, were more profitable than exports last week as demand from the food industry increased, according to Cepea, a University of Sao Paulo research group.
Sales of crystal sugar, which accounts for about 68 percent of all the sweetener sold in the local market, were on average 5.1 percent more profitable than exports in the week ended Feb. 15, Cepea said in a report dated yesterday. That compares with an advantage of 3.6 percent the previous seven days. Raw sugar on ICE Futures U.S. in New York tumbled 2.2 percent last week.
“Sugar trades increased slightly in the spot market in Sao Paulo state last week,” Heloisa Lee Burnquist, an analyst at Cepea, wrote in the report. “The food industry was willing to trade to rebuild inventories and resume producing.”
Crystal sugar prices advanced 0.6 percent to 47.88 reais ($24.34) a 50-kilogram (110-pound) bag last week, Cepea data showed. The recent demand increase may “not last, given that purchasers are receiving contracts traded in previous periods,” Cepea said, citing unidentified traders surveyed by the group.
Crystal sugar sales were 8 percent more profitable last week than anhydrous ethanol, the type blended into gasoline, and 12 percent more advantageous than sales of the hydrous kind, used in flex-fuel cars, Cepea said. Both ethanol and sugar are made from sugar cane in the South American nation.
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 sugar futures traded on NYSE Liffe call for an ICUMSA level of 45.