Quotes swing in the Brazilian market; agents focus on the 21/22 season

Cepea, April 1st, 2021 – The demand for sugar was low in the spot market of SP in March, due to the nearness of the new season (2021/22) and the fact that some cities in the state increased restrictive measures to fight the covid-19 pandemic. As regards supply, agents from sugar mills continued to limit the volume available, but some sales at lower prices were reported when larger volumes were sold.

 

On the other hand, at ICE Futures (NY), prices for demerara sugar were pressed down by positioning in sales, which may be linked to the increase in the number of covid-19 cases in Europe. Besides, restrictive measures in Brazil may limit the demand for ethanol in the Brazilian market and lead domestic mills to produce more sugar than ethanol.

 

PRICES – Crystal sugar prices swung widely in the spot market of São Paulo State (SP) in March. Agents from some sugar mills were willing to lower asking prices, majorly when higher volumes were purchased, while others, with less sugar available, continued unwilling to lower quotes.

 

Late in the month, quotes increased in the spot market of SP, while at the New York Stock Exchange (ICE Futures), quotes for demerara sugar dropped. Thus, the domestic prices for crystal sugar recovered the advantage over exports, which had not been observed since the second week of February, according to Cepea.

 

However, considering the period between February 26 and March 31, prices dropped – the CEPEA/ESALQ Index for crystal sugar closed at 104.15 BRL (18.52 USD) per 50-kilo bag on March 31, 4.7% down from that on the last working day of February (26).

 

As regards sugarcane crushing, with the drought in 2020, Cepea estimates the beginning of activities to be delayed by 5 – 13 days in SP compared to that last season (2020/21), depending on the region.

 

(Cepea-Brazil)

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