Brazilian Sugar Cane Mills to Cancel Sugar Exports

Brazil's sugar cane mills are canceling sugar export contracts and redirecting production to ethanol to take advantage of high energy prices, raising concerns about sugar shortages.

Almost every company involved in Brazil's sugar trade has experienced cancellations, a major international commodity trader said last week as a bystander to Sugar Week in New York. He estimated that the total number of cancellations so far was 200,000 to 400,000 tonnes of raw sugar.

During the peak of the season, Brazil exports about 2.2 million tonnes of sugar per month. A sharp drop in sugar production could lead to a global sugar shortage, according to some traders.

Recent analysts predict that sugar refinery sales of biofuels are becoming more profitable, resulting in lower sugar production and higher ethanol. Ethanol sales in April increased by 2.6%.

According to data from the sugar industry group UNICA, the lowest sugar mix was 34.3% in 2019. The highest sugar mix recorded was 49.7%, when higher prices prevailed.