Brazil will lose a significant share of world sugar trade in the current marketing season, as it is unprofitable for many mills to produce sugar. This was announced on Friday consultants and association representatives in Sao Paulo.
The analysts expect a limited sugar production in the Brazilian Center South of up to six million tons, instead, they will produce from the cane ethanol, because you can earn more with it. Even the most efficient mills can not produce sugar at current sugar prices, according to the industry.
Based on the data of the broker FCStone, which Reuters worked up, the Brazilian export surplus of 30 million tons in 2016/17 will now drop to 22.2 million tons. Under these conditions, the Brazilian market share would fall from 52% to 35%. The winners would be India, Thailand and the European Union, where big harvests are expected everywhere.
Brazilian analysts said that production costs worldwide are only 90% covered by revenues.
At the NYBOT futures exchange in New York, the front month is currently trading at 11.3 cents per pound.Last week, sugar derivatives were at their lowest level in two and a half years. Although sugarcane harvests in the center of South Brazil are expected to be smaller, forward market prices rose only slightly.
Analysts do not expect any changes in crop estimates, so the market could be even weaker.
Text: HANSA Derivatives Trading GmbH / / Graphic: Saxo-Trader 
