Sugar sales within Brazil, the world’s largest producer, were more profitable than exports last week after rains delayed the start of the harvest, according to Cepea, a University of Sao Paulo research group.
Sales of crystal sugar, which accounts for about 68 percent of all the sweetener sold in the local market, were on average 5.1 percent more profitable than exports in the week ended April 19, Cepea said in a report dated yesterday. That compares with an advantage of 0.8 percent the previous seven-day period.
Rains that delayed the start of the crop in Brazil’s center south, the main growing region of the world’s biggest producer, have eased since last week, helping accelerate harvesting. Dry weather is set to continue this week, Sao Paulo-based forecaster Somar Meteorologia said in a report e-mailed yesterday. That will be beneficial for field works, it said.
“With favorable weather conditions to the sugar cane harvesting, mills from Sao Paulo resumed crushing,” Heloisa Lee Burnquist wrote in the report. “However, mills continue to prioritize ethanol and VHP sugar production,” she said, referring to the raw variety of sugar.
While crystal sugar prices advanced 3.9 percent to 45.26 reais ($22.52) a 50-kilogram (110-pound) bag last week, raw sugar for May delivery fell 0.3 percent on ICE Futures U.S. in New York, Cepea and exchange data showed. Supplies of crystal sugar continue to be limited, according to Burnquist.
Crystal sugar sales were 7 percent more profitable last week than anhydrous ethanol, the type blended into gasoline, and 9 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 the South American nation.
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.
To contact the reporter on this story: Isis Almeida in London at Ialmeida3@bloomberg.net
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