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Brazil April sugar exports hit 3-year high; line-up more than triples on year: Williams

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Brazil April sugar exports hit 3-year high; line-up more than triples on year: Williams

Highlights

Brazilian April sugar exports 1.28 million mt

Vessel line-up points to 2.6 mil mt to be exported by June 29

Waiting time at largest sugar terminal 27 days

Santos — Brazil exported 1.283 million mt of sugar in April, the highest for the month since 2017, as it ramps up sugar production after maximizing ethanol production in the last two seasons (April-March), according to data from shipping agency Williams published Thursday.

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The Brazilian sugar line-up as of Wednesday was showing named vessels were expected to export 2.6 million mt up until June 29, more than triple the amount in the same period of both 2019 and 2018, Williams said.

Producers in Center-South Brazil began to consider shifting to maximizing sugar from the cane crop when international prices started to rise in response to forecasts of the first global deficit since 2015-16 (October-September).

Right after that 6-million-mt deficit, CS Brazil exported over 24.56 million mt of sugar in 2017-18 (April-March), 1.48 million mt of it in April. In that season, the region crushed 596 million tons of cane and converted 46.46% of it into 36.06 million mt of sugar.

Between September 1, 2019 and May 13, 2020, the front-month New York No. 11 sugar futures contract, converted into real surged 34% to Real 1,341/mt, hitting the highest during this period of Real 1,513/mt on February 12, the highest price in the local currency since November 17, 2016's Real 1,522/mt. The move has been driven by weather-related falls in production in Thailand and India as well as the real plunging to a record low against the dollar on Wednesday of 5.9007, marking a 47.2% drop since January 1. The New York contract is priced in dollars a pound.

S&P Global Platts analytics estimates that Indian and Thai production will fall by a combined 13.1 million mt in 2019-20 (October-September), giving Brazil leeway to increase its estimated sugar production by 8.2 million mt.

One of the main concerns among sugar trading houses is about Brazil's logistical ability to export the expected huge sugar crop, as some bottlenecks are already developing just under two months into the season. The average waiting time at the Brazil's largest sugar terminal, Rumo, is already 27 days between arrival and expected sailing date.

In the sugar physical market, bids for named berths for June shipment, were at a 7-point premium to unnamed berths, indicating that the market is willing to pay more to receive the sugar faster.