Sugar
Stockpiles accounted for half of Brazil’s sugar export growth in 2009
01/26/2010
|
|
Approximately half of all additional sugar exports from Brazil in 2009 came from stockpiles produced in previous years, according to data released by the Brazilian Sugarcane Industry Association (UNICA). The organization says the numbers help to understand rising price patterns for sugar and ethanol in recent months.
"Of the 4.8 million additional tons of sugar shipped last year compared to 2008, over 2 million tons were produced in past harvests," said UNICA Technical Director Antonio de Padua Rodrigues, explaining that increased sugar production for export because of high global prices is not behind the recent surge in ethanol prices on the domestic market.
Two key reasons contradict the “blame sugar” theory according to Rodrigues: the fact that sugar stocks from previous harvests were high, and the lack of flexibility in sugar mills to redirect production from ethanol to sugar. “The theory we often hear, that the decision by mills to ramp up sugar production was a determining factor in the reduction of available ethanol, is not valid especially because most of the industry cannot redirect production that easily. It is important to highlight that 18% of all processed cane in South-Central Brazil, approximately 85 million tons, are crushed by mills that are not even equipped to produce sugar,” he emphasized.
Atypical conditions
According to Rodrigues, unseasonably heavy rains throughout the harvest as of the second half of 2009 were the main cause of increased ethanol prices. This meant that over 50 million tons of cane could not be harvested, while sugar concentration (Total Recoverable Sugars, or ATR in Portuguese) in the harvested cane experienced a 10 kilogram per ton crop to historical lows. "If those 50 million tons of cane had been harvested, an extra 2.7 million tons of sugar and 2.1 billion liters of ethanol would have been produced," he said.
On the up side, Rodrigues added that the increase in sugar exports strongly contributed to Brazil’s trade surplus. "Sugar production in 2009 in South-Central Brazil grew by only 6.5%, not enough to force up ethanol prices to the extent that we have seen them rise in recent months. Moreover, the expansion of sugar exports was offset by a 35% reduction in ethanol exportes," he said.
To obtain more data, compiled by UNICA, on sugar and ethanol exports (in portuguese), click here.
For UNICA’s release on exports (in portuguese), click here. |
|
