Brazil Sugar Sales Make Up in Part for Fall of Ethanol Exports to US

Sugar factory in Brazil Figures disclosed by the São Paulo Sugarcane Agroindustry Union (Unica) show that Russia, India, Bangladesh, United Arab Emirates and Nigeria accounted for 47% of shipments from January to June this year.

The highlight of the first half was imports from India. In previous crops, India was a net exporter of the product (with exports surpassing imports). As a result of a strong reduction in output during the last production cycle, the country has begun importing Brazilian sugar.

In the first half this year, India, with imports of 1.57 million tons, was the second largest destination of Brazilian sugar exports, and accounted for 15.19% of foreign sales of the commodity. During the period, Russia was the leading importer of the Brazilian product, having purchased 1.66 million tons from Brazil.

With revenues of US$ 3.19 billion in the first half this year, foreign sales of sugar from Brazil, which totaled 10.4 million tons, posted growth of 53% over the same period of last year.

The figure is a record and came in a period during which foreign sales of the main Brazilian commodities decreased by 13%.

The value of sugar exports from Brazil in the first half represents growth of 26.4% over the same period last year.

To the Unica, the export value represents a significant contribution to the Brazilian trade surplus in the first half of 2009, which totaled US$ 14 billion according to figures supplied by the Foreign Trade Secretariat (Secex) of the Brazilian Ministry of Development, Industry and Foreign Trade.

"The global sugar deficit and uncertainty surrounding the output of some countries have led the prices of the product around the world to rocket, enabling a substantial increase in Brazilian exports," stated the technical director of Unica.

In the first half this year, the United Arab Emirates accounted for 5% of Brazilian exports of sugar, and was the fourth leading foreign destination of the commodity.

The United Arab Emirates, for instance, imported 500,000 tons of sugar from Brazil. The survey by Unica showed that besides the United Arab Emirates, four other Arab countries are in the list of top ten Brazilian sugar importers.

The four other countries are: Saudi Arabia, Morocco, Algeria and Yemen, with combined imports of 1.62 million tons. Coupled with sales to the Emirates, these four Arab countries imported 20.6% of all the sugar that Brazil sold to the world in the first half this year.

"The Middle Eastern countries, Russia, and African countries are large importers of the Brazilian product," informs the technical director of Unica, Antonio de Pádua Rodrigues.

According to Rodrigues, the average price obtained by Brazilian farmers from sales of sugar in the first half this year was 51% higher than revenues from domestic sales of hydrated ethanol. "This has encouraged industries to produce greater volumes of sugar," he said.

The increase in foreign sales of sugar has partly made up for falling ethanol exports. In the first half of 2008, the country exported 1.97 billion liters of ethanol. In the first half of 2009, exports decreased further by 25%, having totaled only 1.45 billion liters.

According to the Unica, the lower export volume of ethanol is equivalent to the reduction in imports by the United States, which totaled 500 million liters from January to July 2008, as against 72 million in 2009.

The European Union and the Caribbean Basin Initiative (CBI) member countries were the leading importers of Brazilian ethanol in the first half of 2009. Together, they accounted for more than 55% of Brazilian exports, with 412 million and 400 million liters, respectively.

Anba

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