MUMBAI (Commoditiescontrol) - Spot crystal sugar prices soar up nearly 10% during October month in Brazil, over increased demand and drop in sugar production.
Prices of crystal sugar remained firm in Sao Paulo market during the last month and hit the three-month high on Tuesday, as sweetener supplies dropped in the market over lesser sugar production.
Accordingly, crystal sugar prices rose 3.54% in Sao Paulo market between October 24 to 31 and closed at BRL 57.88 (US$17.67)/ 50 Kg bag on Tuesday, the highest level since August 1st.
While sweetener prices have also increased by 9.66% during October month.
On other hand, in September month, prices were traded range bound, with an average rate of BRL 52.41 per 50 Kg bag, also hit BRL 51.96/ 50 Kg on September 5, a two-year low. Compounded with excess sugar supply over weak domestic demand and lower international futures.
According to UNICA, Brazilian sugar mills inquiring more sugarcane to produce ethanol instead of sugar in last month. This is in adherence of higher demand of biofuel and better returns against sweetener.
According to the bi-weekly data released by Brazilian Sugarcane Industry Association (UNICA), sugar production in Centre-South Brazil has dropped by 12.28% yera-on-year to 19.78 lakh tonnes during 1st to 16th October 2017. While sugar output has also weakened by 30.54% from second half of September 2017.
Further, the production mix for sugar was also dropped to 43.76%, which was 49.62% in 2016 for the corresponding period. Whereas, in the second half of September 2017, production mix for sugar was 46.54%. Manifesting the fact that, mills favored ethanol production over sugar because of the better return.
On other hand, C-S mills have crushed 4995.96 lakh tonnes of sugar so far during April 1st to October 15th, 2017 and produced 312.13 lakh tonnes of sugar. While total ethanol production has reached at 2102.5 crores liters in current season 2017-18 (Apr-March).
According to Datagro, a Brazilian consultancy, C-S sugar mills are expected to crush 6050 lakh tonnes of sugarcane in the current season and produce 363.8 lakh tones of sweetener.
(By Commoditiescontrol Bureau: +91-22-40015532)
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