Brazilian sugar price in 2022

Let’s summarize the scenario so that you understand what factors press the price at the moment.

• War in Ukraine has damaged the production and flow of food in the world, as the countries involved in conflict offer fertilizers and grains such as wheat and corn.

• War also directly impacted the cost of fossil fuels that generated a chain reaction, resulting in increased freight that make up the logistics chain in Brazil.

• The most valued fuel in Brazil motivated sugarcane plants to direct production to ethanol instead of sugar. Even some sugarcane plants preferred to cancel supply contracts already established last year, as ethanol gives greater profitability, is sold in the domestic market and payment is made in two days. That is, simplified sale with better profit.

• To protect prices in your market and avoid shortage of India prohibited the export of Indian sugar from June 1 to October 31, 2022. reducing the offer.

The last two themes speak of supply reduction.

The war has also brought an increase in demand, as many countries are stocking foods for fear of the ghost of the third World War. Other demands came from countries that previously did not buy significant amounts of sugar in Brazil, such as: Kazaquistan, Turkia, Georgia and even Russia.

Here we combine supply reduction x demand increase.

The price has risen and has been valued since the beginning of 2022. It is expected to reach astronomical values in the second half of 2022, if the war continues or worsens taking higher proportions.