The record sugarcane crop that Brazil should pick this year opens perspectives for greater sugar exports. According to estimates disclosed this week by the National Food Supply Company (Conab), 469.8 million tons of sugarcane should be picked, a historic record.
This year’s harvest represents 8.9% more than the 431.4 million tons picked in the previous crop. The good performance of crops should sustain the increase of exports, which should reach 17%.
The São Paulo Sugar Cane Agroindustry Union (Unica) forecasts foreign sales of 19.4 million in the 2006/2007 crop, whose harvest began in April and should follow through to November. In the previous harvest, 16.6 million tons were exported.
"The greater sugarcane production is going to result in more alcohol and sugar and further availability for exports," stated Eugênio Stefanelo, technician at the Conab and professor at the Federal University of Paraná, in the southern Brazilian state of Paraná.
Alcohol exports should not rise. The Unica forecasts foreign sales of 2.3 billion liters of alcohol in this harvest, against 2.4 billion in the previous harvest. There is a great alcohol demand on the Brazilian market.
Foreign sales of sugar, on the other hand, are powered by greater global demand. "Europe is reducing sugar exports," stated Maurílio Biagi Filho, president of the Brazilian Rural Society (SRB) and counselor at the Unica.
The European Union has reformed its program of subsidies to sugar exports complying with demands by the World Trade Organization (WTO). The bloc is mainly turned to production for the domestic market.
The European Union is still, according to Stefanelo, the main buyer of Brazilian sugar on the foreign market, but the sector is following the same policy as that adopted by other export sectors in Brazil, the diversification of export destinations.
"Brazil adopted an extremely correct diversification policy in 2000. Exports to Asia, Africa, the Middle East and Latin America are expanding," according to Stefanelo.
The country is the main world exporter of sugar and the production cost in the sector is much lower than that of other regions that make the product, like the United States and Europe. Between January and April this year, Brazil exported 4.1 million tons of sugar.
For the time being, however, there is a reduction in sales when compared to the same period in 2005, when exports totaled 5 million tons of sugar.
New mills
According to Biagi, in Brazil there are around 80 projects for mills and distilleries that should start operating up to the year of 2012. They will consume investment of US$ 30 billion. According to the president of the Agroenergy Committee at the SRB, Brazil is going to pick an extra four million tons of sugarcane a month up to 2012.
"We broke records last year and in the previous year and are also going to break a record this year. We must break records every year or else we will have problems supplying the domestic market," stated Biagi.
The new mills should guarantee further exports. Brazil has grown expressively on the world sugar market in recent years. At the beginning of the 1990s, the country exported one million tons of sugar per crop, according to the Unica counselor. The Arabs are great buyers of Brazilian sugar.
Between January and April this year, of the US$ 1.6 billion exported by Brazil to the 22 countries in the League of Arab States, US$ 358.2 million were sugar. The Arabs and Brazilians even have joint projects in the sector.
The Brazilian company Cristalsev and Cargill Africa have a joint project for the construction of a sugar refinery in Syria in partnership with three Syrian companies, Assaf Invest, Sugar Invest and Sugar Mezzanine.
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