Cepea, June 1st, 2021 – Crystal sugar prices have been on the rise in the spot market of São Paulo State (SP) since the beginning of sugarcane crushing (2021/22 crop). In May, the average of the CEPEA/ESALQ Index for crystal sugar closed at 115.08 BRL per 50-kilo bag, 6.2% up from that in April and the highest, in nominal terms, in the series of Cepea.
Valuations were linked to the low supply in the first two months of the season, due to the delay of crushing and the decrease in the productivity of sugarcane crops because of low rains.
At the New York Stock Exchange (ICE Futures), prices for demerara sugar ended the month on the rise, reflecting perspectives for lower production in Brazil. According to Consecana-SP (Council of Sugarcane, Sugar and Ethanol Producers in the State of São Paulo), the output this season may be up to 7% lower than that in the previous season. In some Brazilian regions, sugarcane farmers estimated production to decrease by more than 20%. Besides, the lower productivity of sugarcane crops has pushed up ethanol prices, leading some plants to increase ethanol production and reduce sugar production.
Still, the USDA estimates the world sugar output to be 6 million tons higher in 2021/22, at 186 million tons, based on the recovery of supply in Thailand, the European Union and India. Consumption should set a record, at 174 million tons, boosted by the demands from China and India (USDA).