Sugar factory that have been facing high transport costs to purchase the commodity may face tighter supplies by the end of the year, with mills processing more sugarcane into ethanol, rather than into sweetener, according to BP-Bunge Bioenergia. Transport costs are at their highest level in at least a decade, making sugar factories to delay the purchase of raw sugar to be refined. The volume to be shipped in Brazilian ports fell 60% year-on-year. Some mills in Brazil are taking advantage of high ethanol prices, processing more cane into the biofuel. That means a smaller amount of sugar will be available when the demand returns, said Ricardo Carvalho, the commercial director at Joint Venture between BP and Bunge. “We are very optimistic. From the fourth quarter, the world will have no sugar left”. BP-Bunge Bioenergia estimates sugar production in Brazil’s Center-South region will drop to 34 million tons in the current season, of 35.5mt that mills would produce if they process all sugarcane into sweetener. The company forecasts sugarcane crush in the region between 545 million and 550 million tons in this harvest.
Sources: Bloomberg/Notícias Agrícolas (*Translated by Ia Niani)