Thanks to China Sugar Exports from Brazil Grow 128%

Brazilian mills had revenues of US$ 825 million with exports of sugar in bulk in the first five months of this year. This value represents a 128% increase over the same period last year.

Refined sugar sales grew from US$ 367 million to US$ 544 million, a growth of 48.2%.

"There was an increase in the consumption in China," stated Dernizo Caron, a partner at agribusiness consultancy Richter Caron. According to Caron, the Chinese movement caused not only an increase in the sales of the product, but also upped the price.

A ton of sugar in bulk was exported at a mean price of US$ 197 in May this year, against US$ 145 in the same month last year. The ton of refined sugar rose from US$ 176 to US$ 212.

According to the official Chinese news agency, Xinhua, sugar consumption in the country should grow another 5% a year over the next few years.

The Chinese do not have any available land to increase their beetroot and sugarcane production so as to increase their sugar production.

In the country, the consumption of the commodity is 11 million tons per year and production last year was 10.2 million tons.

If only the month of May is taken into consideration, Brazilian sugar export revenues grew even more: 257% over May 2004.

Sales revenues reached US$ 232.2 million in May this year, against US$ 65.7 million in the same month last year. Revenues from refined sugar exports rose 115% in the period, from US$ 64.9 million to US$ 140 million.

Brazilian sugar exports also rose in terms of volume, but at a lower proportion. In May, the total shipped in bulk was 159% greater than in the same month of 2004, and that of refined sugar grew 78.8%.

This shows the influence of the price increase in the performance of the Brazilian trade balance in the sector.

Price

The good sugar prices, according to Vitor Silveira, an analyst in the commodity department of Theca brokerage, caused an anticipation of the sugarcane harvest.

The harvest normally begins in May, but some mills started harvesting in March, according to Silveira.

In São Paulo, in southestern Brazil, the harvest began in early to mid April. In the beginning of January, for example, the 50 kg bag of special crystal sugar was sold for US$ 12.50 on the domestic market. June 2, the price was at around US$ 10.60.

The entry of greater volumes generated by the anticipated harvest, however, has also started affecting international prices.

In May, a ton of sugar in bulk was exported for approximately US$ 13.6 less than in April. The price per ton of refined sugar dropped US$ 5.

The World Trade Organization (WTO) decision against European sugar subsidies is also bringing incentives to Brazilian exports, according to Silveira.

"There is an expectation of Brazil taking over part of the volume that the European Union is going to stop exporting," stated the analyst.

The WTO confirmed, at the end of April this year, the illegality of subsidies offered by the EU to sugar producers.

Brazil, Australia and Thailand opened a panel against the bloc and received a favourable decision by the organization in August last year.

The European Union, however, appealed in January and, now, received another negative answer from the WTO.

The decisions are causing a series of investments in sugar mills in Brazil. "There is being great investment in new units," stated Silveira.

According to Caron, a large part of the increase in sugar production in Brazil should be turned to the foreign market, where there is growing demand.

Last year, the country produced around 25 million tons of sugar and exported around 18 million. This year production should reach 28 million tons and around 20 million will go to the foreign market. These figures were supplied by Theca.

The growth in sugar production is also due to an increase in the sugarcane harvest. Brazil harvested 380 million tons of sugarcane in the last crop, 2004/2005.

In the previous harvest, the total had been 260 million tons. Up to the 2010/2011 crop, the target is to reach 560 million tons.

ANBA – Brazil-Arab News Agency – www.anba.com.br

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