The largest sugar producing country in the world, Brazil currently produces around forty percent of the world’s exported sugar. Because of its agricultural prowess, Brazil has managed to carve out a world leader status in sugar and sugar cane, and its product is in high demand around the globe.
Brazil grows so much sugar cane that even the large amounts of sugar it exports around the globe (over 17 million tonnes in 2006) represent only a fraction of its total sugar cane crop. It is estimated that over half the sugar cane grown in Brazil is turned over to ethanol production rather than sugar production.
Both the size of Brazil’s sugar cane crop, and how much of it the Brazilian Government decides will be exported in the form of sugar are significant factors in world sugar trading, so much so that they directly affect the price of sugar on a global scale. Shortfalls send sugar prices skyrocketing, but years in which Brazil has an especially good crop or decides to export more sugar than usual make prices fall dramatically, this was demonstrated in 2002, when Brazil sold so much sugar on the world market that prices were as low as five cents per pound.
Brazilian Sugar Manufacturers
Sugar production is centralized in two main areas in Brazil, the Sao Paulo region is the largest of these areas, and accounts for around 60% of the nation’s sugar cane crop. This region is very fertile and relatively flat, factors which make the sugar cane grow well, and the subsequent harvesting of it relatively easy. The harvest season in the Sao Paulo region runs from May through November, and it is during these times that sugar prices typically dip on the global market, as more sugar becomes available, and the pressure on suppliers is alleviated. From December to April, sugar supplies become tighter and Brazilian sugar may be more difficult than usual to obtain, which is why many sugar buyers secure supplies in advance.
The second sugar producing region of Brazil lies in the states of Alagolas and Pernambuco. The land here is much more hilly, and the soil less fertile than in Sao Paulo Most of the sugar here goes to supply regional demand, and the harvesting season for this region is from September through May.
Brazilian Sugar Exports
The main destination for Brazilian Sugar is the United States of America, which currently purchases around twenty percent of all sugar exported from Brazil. Other major trading partners include Argentina and China, and the remainder of the sugar goes to Japan, Algeria, France, Nigeria, South Korea, and Italy. It is worth noting that Brazilians themselves are very large consumers of sugar, and will buy it regardless of variations in the price. For a long time, Brazil was the only major sugar exporting nation in the world which consumed more sugar domestically than it exported. Now sugar exports have risen so much that even the Brazilian sugar consuming population cannot consume more than is exported, but nevertheless sugar still remains a very popular foodstuff in Brazil.
Grades of Brazilian Sugar
It may surprise you to learn that although Brazil produces huge amounts of sugar every year (over 30 million tonnes), very little of this sugar is sold in the highly refined form of ICUMSA 45 which is often ferociously sought after by sugar buyers. ICUMSA 45 sugar is pure refined sugar with a sparkling white color that is quite familiar to consumers in the West, as it is the sugar that is sold in supermarkets and commonly used in eateries. There are sometimes small amounts of Brazilian ICUMSA 45 available, but the majority of Brazilian sugar exported globally is raw sugar which is then refined in other countries. If one is seeking a lower grade refined sugar, one can generally source Brazilian ICUMSA 150 much more easily that ICUMSA 45, but even ICUSA 150 is still not available in the same volumes as raw sugar. For reasons which will be explained shortly, if one seeks large volumes of Brazilian sugar, one may have to content oneself with purchasing raw sugar.
Brazilian Sugar In Short Supply
It seems strange to learn that even though Brazil is the largest sugar producing nation in the world, it is still sometimes very difficult for new buyers in the sugar market to source Brazilian sugar supplies. There are several reasons for this state of affairs, but the main one is the fact that Brazilian sugar is traded heavily in the futures market, and crops may be purchased as many as two or three years before they are harvested. This means that a newcomer to the market must content himself with the remnants of Brazilian sugar which have either not been secured in futures trading, or which have been grown in excess of the anticipated orders.
Another reason for Brazilian sugar being hard to obtain is the fact that the demand for ethanol, or sugar-ethanol, as it is sometimes called, is growing on a global scale. As a bio-fuel, it is a viable alternative to petroleum products, and when used as an additive in petrol, makes scant and expensive fuel supplies last longer. Population growth, the dwindling of the world’s oil stocks, and uncertainty in the Middle East where much oil production takes place are all factors which are pressing the demand for bio-fuels to new levels. However there is only a finite amount of sugar cane which can be grown in any one year, so the more cane turned over to ethanol production, the less sugar is produced and is available for export.
Prices of Sugar from Brazil
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