CEPEA/ESALQ Index of crystal sugar in Brazilian state of São Paulo closes at 44.98 reais/50-kg bag on Sept. 16, up 2.25% in first two weeks of September

Nevin Barich

PIRACICABA, Brazil , September 19, 2013 (press release) – Crystal sugar prices are firm in the spot market in São Paulo. The demand is reduced, given that purchasers are closing only a few trades, to meet immediate needs. Other buyers closed trades in early September, and, as a result, they are not operating in the spot market. Players from mills, in turn, are not offering large sugar amounts, claiming the need of building stocks to accomplish contracts during the off-season period.

On Sept. 16, the CEPEA/ESALQ Index of crystal sugar (São Paulo state) closed at 44.98 reais or 19.75 dollars (50-kilo bag), picking up 2.25% in the first fortnight of September.

Unica (Brazilian Sugarcane Industry Association) data indicates that the sugar production will be 3.74% smaller in the second fortnight of August comparing to the same period of the previous crop.

In the accumulated of the 2013/14 season (April – August/13), the Central-Southern region in Brazil produced 19.961 million tons of sugar, for an increase of 6.96% in relation to the same period of the 2012/13 crop, according to Unica data. São Paulo State produced 13.914 million tons of sugar, moving up 11.86% in the same period.

Considering exports, in spite of the limited liquidity, some crystal sugar trades were registered. The ESALQ/BVMF Index, referring to the product at Santos port (does not include taxes, Icumsa color 150), which includes domestic sales and to export, closed at 47.47 reais (20.96 dollars) on Sept. 16, for an increase of 2.77% compared to Aug. 30.

According to data from Cepea, exports remunerated 2.78% more than sales in the spot market in SP from Sept. 9-13. While the CEPEA/ESALQ Index of crystal sugar averaged 44.78 reais or 19.65 dollars per 50-kilo bag, price quotes October 2013 delivery at ICE Futures would be equivalent to the average price of 46.02 reais or 20.20 dollars per bag. For this calculation, it was considered 81.78 dollars per ton FOB costs, 80.00 dollars per ton of quality premium and average exchange ratio of 2.278 reais/dollar.

As for the price parity calculated by Cepea, crystal sugar remunerated 16% more than anhydrous ethanol in early September in São Paulo state. For hydrous, the sugar advantage was 25% in the same period. (Cepea – Brazil)

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