CEPEA/ESALQ Index of crystal sugar rises 3.1% to 51.49 reais/50-kg bag in February

PIRACICABA, Brazil , March 11, 2014 (press release) – The demand for additional crystal sugar volumes remained limited in the spot market in São Paulo during February. Players from the industry say that the product received through contracts closed previously was enough to meet production needs. As a result, trades in the spot market involved smaller volumes compared to those in January – only a few trades involving higher amounts were closed.

In spite of that, players from the industry had not decreased prices. This behavior was affected by international quotes (ICE Futures) of demerara sugar, which resumed moving up in the month.

In February, the CEPEA/ESALQ Index of crystal sugar (São Paulo state), ICUMSA color between 130 and 180, upped 3.08%, to close at 51.49 reais (21.99 dollars) per 50-kilo bag. The monthly average was 50.38 reais per 50-kilo bag, 0.18% higher compared to that in January (50.29 reais per bag).

The dry weather observed between January and February, which affected part of sugarcane in the Central-Southern Brazil (major producer and exporter of sugar) of the 2014/15 season, was the major fact that underpinned international and Brazilian quotes.

In the international scenario, from Feb. 21-28, the contract for demerara sugar March 2014 delivery at ICE Futures dropped 1.5%. At Liffe (London), the refined sugar contract May 2014 delivery increased 2.23% in the same period.

According to data from Cepea, sales in the spot market in SP remunerated 2.79% more than exports from February 24-28. While the CEPEA/ESALQ Index of crystal sugar averaged 51.35 reais or 21.94 dollars per 50-kilo bag, price quotes March 2014 delivery at ICE Futures would be equivalent to the average price of 49.96 reais or 21.34 dollars per bag. For this calculation, it was considered 75.93 dollars per ton FOB costs, 94.00 dollars per ton of quality premium and average exchange ratio of 2.3402 reais/dollar.

Concerning the spot market to export, the ESALQ/BVMF Index closed at 52.36 reais (22.44 dollars) on February 28, moving up 4.68% in the month. This Index refers to the product at Santos port (does not include taxes; Icumsa color 150), which includes domestic sales and to export.

As for the price parity calculated by Cepea, crystal sugar remunerated 10% more than anhydrous ethanol in the last week of February in São Paulo state. For hydrous, the sugar advantage was 12% in the same period. (Cepea-Brazil)

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