Nov 08, 2010
India Imported 19% of Brazil's 2009 Sugar Exports
Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.
After a series of poor sugarcane harvests in India, the country became the largest importer of Brazilian sugar in 2009. During 2009, Brazil produced 33 million tons of sugar and exported 24 million tons. Of the total Brazilian exports in 2009, India imported 4.6 million tons or 19% of the total. The second largest importer of Brazilian sugar in 2009 was Russia at 2.7 million tons.
Through the end of October 2010, Brazil had produced 27 million tons of sugar and they have exported 19 million tons.
The average domestic price for sugar in Brazil in 2009 was R$ 47 per sack of 50 kilograms (US$ 27.65 per 110 pounds using an exchange rate of 1.7 Brazilian reals per dollar) and thus far in 2010, the average domestic price has been R$ 57 per sack (US$ 33.50 per 110 pounds using the exchange rate of 1.7 Brazilian reals per dollar).
Brazilian government officials do not expect short supplies of sugar in the domestic market, but they do expect the domestic price of sugar to increase due to rising international prices.
A number of sugar/ethanol mills in Brazil have already closed for the season and the harvest is expected to wind down by early December. The sugarcane harvest in Brail will resume next March or April. During this intra-harvest period, ethanol prices generally increase in Brazil due to tight supplies and a lack of stored ethanol. The government has been trying to give incentives for building additional storage units for ethanol to smooth out the supply, but progress has been slow.
It remains to be seen if ethanol prices increase once again and the extent of the price rise. Drivers of flex fuel cars in Brazil always have the option of using ethanol (E100) or gasoline depending on the price at the pump. If the price of ethanol is more than 70% the price of gasoline, it is cheaper to use gasoline. More than 90% of all new cars in Brazil are flex fuel and it is estimated that flex fuel cars will surpass 50% of the total Brazilian automobile fleet sometime during 2011.