Sugar on the rise: Brazilian production faces global challenges and opportunities

Published 2024년 12월 2일

Tridge summary

A report by Itaú BBA's Agro Consulting explains the reasons for the historic rise in international sugar prices, which is expected to continue due to a global supply shortage. This situation presents challenges and opportunities for Brazilian sugar and ethanol mills, especially with sugar's higher price compared to ethanol. The report suggests marketing strategies for producers and emphasizes the need to increase global production to meet demand. It also discusses hedging strategies and the economic potential of recovery in production in other countries. The sugar premium in Brazil has encouraged new investments in mills and offers a possibility for returning investments through the profit from sugar production.

Disclaimer:The above summary was generated by Tridge's proprietary AI model for informational purposes.

Original content

A report by Itaú BBA's Agro Consulting provides a detailed analysis of the reasons behind the historic appreciation of sugar in the international market. With high prices compared to ethanol, the current scenario presents challenges and opportunities for Brazilian sugar and ethanol mills. The consultancy also proposed marketing strategies for producers, highlighting the need to expand global production to meet growing demand. The current price of raw sugar is 22 cents per pound (USDc/lb), 30% above the average of the last 12 years. This level reflects the global shortage of supply, even with Brazil and India producing record volumes in the 2023/24 harvest. Other major exporters, such as Thailand, the European Union and Mexico, are facing significant drops in production, between 20% and 40% below their historical highs. This supply restriction occurs in a context of typical commodity cycles, alternating between excess and shortage of production. Although Brazil has the agricultural ...

Source: Portal Do Agronegocio