São Paulo – Despite the heated global sugar and ethanol market, Brazil has not been capable of supplying the growing demand. After promoting 3.5% expansion of offer of sugar and ethanol this year, Datagro, a provider of services in the area, now believes the offer may drop 2.2%. This information was supplied by the company president, Plinio Mario Nastari, during the 9th International Datagro Conference on Sugar and Alcohol, in São Paulo.
The lower offer due to excessive rain should affect the 2009/2010 sugarcane crop, as should the low industrial performance of mills. As the sector has faced a price crisis over the last two years, and low liquidity, since September last year, producers invested little in fertilizers and herbicides.
This should be a problem in a bullish global market. The global sugar deficit, for next year, should reach seven million tonnnes. India, a great supplier of the product, is also facing problems. After a crop of 26.4 million tonnes in 2007/2008, the country harvested just 14.6 million tonnes in the 2008/2009 crop and should not produce much more in 2009/2010: 15.3 million tonnes for a domestic demand of 23 million tonnes.
"Despite the price incentives, mills have not managed to expand sugar production due to rains," said Nastari. In the case of sugar, Brazil should have an export surplus of 21.6 million tonnes. Initially, the export surplus had been estimated at 23.3 million tonnes. The grinding of sugarcane, in the 2008/2009 crop, should be from 523 million tonnes to 533 million tonnes. There should be pressure both in sugar and ethanol prices in coming months.
*Translated by Mark Ament
