Brazilian sugar exports in the 2019/20 season will likely hit a 12-year low, totaling just 18.5 million tonnes as depressed global sugar prices steer cane mills away from export markets, consultancy JOB Economia said in a report on Wednesday.
By contrast, Brazil is expected to produce the highest ever volume of ethanol, at 34.2 billion liters, as mills favor the fuel over sugar in their production strategies and ratchet up competition with increasing corn-based ethanol output, JOB said.
The last time Brazil exported less sugar than 18.5 million tonnes was in the 2007/08 season, said the report. According to government trade data, Brazil shipped about 20 million tonnes in the previous season.
"We went back 12 years in terms of sugar export volume," said the consultancy's director, Julio Maria Borges, adding that the local ethanol market offers a far better alternative for cane processing companies than producing sugar.
Raw sugar prices in New York touched a recent decade-low and continue to hover at levels most producers see as unprofitable.
JOB revised its estimates for the current season.
It now sees the center-south cane crop at 579 million tonnes versus 568 million tonnes forecast previously. It expects sugar output to reach 25.7 million tonnes, down from 27.8 million tonnes in a previous estimate.
Center-south ethanol output was revised upward to 30.7 billion liters.
Considering additional ethanol production from the North-Northeast region of 2.2 billion liters, and corn-based ethanol output totaling 1.4 billion liters from new plants in the center-west, JOB said Brazil's biofuel production would top last season's record 33.8 billion liters and hit an all-time high of 34.3 billion liters.
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