Cepea, Nov. 3 – Crystal sugar prices were on the rise in the spot market of São Paulo State and reached 100.00 BRL per 50-kilo bag in late October, an all-time high in nominal terms, of all Cepea series. In real terms, however, the current sugar monthly average is the highest since March/11, when it was 100.42 BRL per 50-kilo bag (prices deflated by the IGP-DI from Sept/16). On October 31, the CEPEA/ESALQ Index, Icumsa color from 130 to 180 (São Paulo State), closed at 100.88 BRL (31.67 USD) per 50-kilo bag, 6.53% higher compared to September 30.
Although sugar production was increasing and demand was weak in the spot market in late October, plants raised their bidding prices. This scenario may be linked to the higher amount of sugar allocated to the international market. According to Secex (Foreign Trade Secretariat), this year (January to September), Brazilian exports have been 33% higher than in the same period last year. Besides, mills may anticipate the crop closure this year, and the offseason period may be longer.
According to Unica (Brazilian Sugarcane Industry Association), in the 2016/17 crop (April to September), sugar production in São Paulo State is 18.33% higher than in the same period last year. The production mix in SP show 53.37% of sugarcane is allocated to sugar production and 46.63%, to ethanol.
The ESALQ/BVMF Index of crystal sugar, which refers to the product at Santos port (no taxes; Icumsa color 150) including domestic sales and to export, increased 2.84% in the month, closing at 98.80 BRL (31.06 USD) per 50-kilo bag on October 31.