New Expectations in Brazil’s Sugar Industry
Sugar futures contracts closed with a decline in international exchanges this Tuesday (19th). This reflects the anticipation of rain in the Central-Southern region of Brazil, the largest production area, as the beginning of autumn approaches. Analysts suggest this may bring some recovery for sugarcane. Rainfall in sugarcane fields in the Central-Southern region of Brazil between November last year and February this year was 26% below normal, exacerbating the drop in production compared to the 2021/22 harvest volume.
Marcelo Filho commented, “Part of the decline in sugar prices can be explained by the forecasted rainfall in the Central-Southern region starting next week. Confirmation of this scenario should bring some relief to areas to be harvested from July onwards.”
Additionally, according to analysis by StoneX experts, “Market agents have factored in recent improvements in production in India and Thailand; losses here will be less than initially expected,” which also influenced the market’s performance yesterday.
New York
In ICE Futures in NY, raw sugar closed at 21.64 cents per pound on Tuesday, May 24th, marking a decrease of 52 points compared to the previous day’s prices. The July 24th fabric fell 46 points to 21.36 ct/lb. Other contracts, except for July and October/26 screens, fell between 1 and 38 points, with increases of 5 and 9 points respectively.
London
Tuesday also saw a downturn in London, with all white sugar screens closing in red. The May/24 lot signed at $619.90 per ton, marking an $8.10 devaluation compared to the previous day. The August/24 curtain fell $7.80 to $604.20 per ton. The remaining contracts fell between $3.90 and $6.90.
Domestic Market
In the domestic market, a decline in crystal sugar prices was observed on Tuesday, measured by the Cepea/Esalq Index. A 50-kilogram bag traded at R$144.01, representing a 0.28% decrease compared to Monday’s R$144.42.
Hydrous Ethanol
Hydrous ethanol prices, measured by the Paulínia Daily Indicator, closed with a seventh consecutive day of increases. Biofuel traded at R$2,246.50 per cubic meter yesterday, compared to R$2,240.50 the previous day, marking a 0.27% increase in inter-day comparison.
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