Bloomberg News

Brazil’s Domestic Crystal Sugar Sales Set to Retreat, Cepea Says

November 15, 2011

Nov. 15 (Bloomberg) -- Sales of crystal sugar in Brazil’s domestic market are set to fall in “upcoming weeks” as confectioners reduce purchases due to a drop in sales, according to Cepea, a University of Sao Paulo research group.

Crystal sugar, which accounts for about 68 percent of all the sweetener sold within Brazil, is used by industry to make soft drinks, cakes and doughs. Brazil is the world’s largest producer and exporter of sugar.

“Some companies in the candy industry report a reduction of sales and, therefore, they decrease their purchases for raw material,” Cepea analyst Heloisa Lee Burnquist wrote in a report yesterday. “Processing and packing companies have already built in provisions for the upcoming months.”

Sales of crystal sugar in Brazil’s domestic market were 3.1 percent more profitable than exports last week, down from a 4.3 percent level in the week ended Nov. 4, according to Cepea. White sugar futures fell 2.1 percent last week on NYSE Liffe in London, while raw sugar slipped 2.2 percent on ICE Futures U.S. in New York in the same period.

Sales of crystal sugar were 38 percent more profitable last week than anhydrous ethanol, the type blended into gasoline, and 42 percent more advantageous than sales of the hydrous kind, used in flex-fuel cars, Cepea said. Both ethanol and sugar are made from sugar cane in Brazil.

Crystal sugar has an International Commission for Uniform Methods of Sugar Analysis level of between 130 and 180, according to the Cepea website. A lower level corresponds to a higher degree of whiteness. Refined sugar futures traded on NYSE Liffe call for an ICUMSA level of 45.

--Editors: Sharon Lindores, Nicholas Larkin

To contact the reporter on this story: Isis Almeida in London at Ialmeida3@bloomberg.net

To contact the editor responsible for this story: Claudia Carpenter at Ccarpenter2@bloomberg.net.


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