In Brazil, the demand for national sugar was not significantly impacted. “COVID-19 does not appear to have affected sugar shipments in recent weeks – especially from the port of Santos, the main outlet for the commodity,” explains INTL FCStone Market Intelligence Analyst, Matheus Costa. The functioning of ports is a favorable condition to the demand for Brazilian products. Like the cotton market, whose Brazilian exports are still surprisingly heated, with great Asian demand. “The market expected a strong reduction in Brazilian shipments, which has not yet been observed. In January, the South American country exported 308.8 thousand tons of cotton, an absolute record for monthly shipments”, highlights the group, in a report. In February, shipments of the plume reached 169.9 thousand tons, registering an increase of 81.7% in comparison with the same period of the previous year and a record for the month. For coffee prices, the slowdown in demand may be minimally balanced by the feeling of tightening of supply in the coming months. However, if the problem continues, the prospect of a large production for the 2020/21 harvest may put considerable pressure on prices, while the arrival of the new coffee on the market is approaching (in mid-June). It is noteworthy that Italy, the third largest buyer of Brazilian coffee, was the first to present severe problems due to the coronavirus. Regarding the use of corn for ethanol, one of the factors that have reinforced the growth in domestic demand for cereal in recent years, there may be impacts due to the drop in oil / gasoline prices, which have been weighing on biofuel prices, reducing or negating margins of the plants. Although the COVID-19 epidemic started in China, the world’s largest soybean importer, the prospects for Brazilian exports remain positive, with ship line-ups for March indicating volumes that could exceed 13/14 million tonnes. In the domestic market, for now, there are still no signs that the crushing can be stopped, even because the margins are favorable. In addition, the activity of processing soybean into bran and oil is carried out by a few employees.
Source: INTL FCStone / Noticias Agricolas