Higher ethanol consumption in Brazil contributes to global sugar deficit

The global sugar supply will change into the deficit zone in 2018/19. In the past few years, however, there were large overhangs, as yesterday the consulting firm Datagro in Sao Paulo, the financial center of Brazil.
Accordingly, during the marketing period from October 2018 to September 2019, 710,000 tonnes more sugar will be consumed than produced. In the previous season, there was a surplus of 3.68 million tons.
The change of direction is based on the reorientation of the Brazilian sugar industry in Center South. In addition, there is also a smaller production in India, Europe, Russia, Thailand and the USA.
If this analysis is correct, it would be the most significant trend change in the global sugar supply, after 2017/18, when 8.35 million tonnes of sugar surpluses were still produced.
The consultants lowered their estimate for Brazilian sugar production this year in Center South to 27.29 million tons from 27.93 million tons. In return, ethanol production will increase from sugar cane. This seems to be more lucrative for the processors. Production increases by 400 million liters to 30.5 billion liters.
From January to August 2018, Brazil consumed 11.5 billion liters of hydrous ethanol.This was 41.8% more than in the same period last year. Most passenger cars in Brazil can run on both gasoline and hydrous ethanol. Ethanol is currently cheaper.

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