Sugar exports from Brazil, the world’s largest producer, remained more profitable than domestic sales after the country’s currency weakened, according to researcher Cepea.
Exports were 2.3 percent more profitable than sales in the local market last week, Heloisa Lee Burnquist, an analyst at the University of Sao Paulo group, said in a report yesterday. Brazil’s real on May 23 touched 2.1062 to the dollar, the weakest level since May 2009. The currency is down 6 percent this year.
“The international market is still more advantageous compared to the domestic because of the sharp dollar valuation against real,” Burnquist said. Declines by the real increase the value of exporters’ foreign sales on conversion to the Brazilian currency.
A weaker real has compensated for lower sugar prices on the international market this month, according to the report. Raw sugar for July delivery was down 6.3 percent in May at 19.78 cents a pound by 5:13 a.m. on ICE Futures U.S. in New York.
Domestic sugar sales last week were 24 percent more profitable than selling anhydrous ethanol, the kind blended into gasoline, and 42 percent more advantageous than hydrous ethanol, the type used in so-called flex-fuel cars, according to Cepea.
Both the sweetener and the biofuel are made from sugar cane in Brazil. About 46 percent of the country’s cars were so-called flex-fuel vehicles able to burn either gasoline or ethanol as of last year, Sucden Geneva SA analyst Claudiu Covrig said by e- mail on May 18.
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