Overcoming Challenges When Importing Sugar from Brazil

Unlike smaller producers in other countries who actively seek new buyers, Brazilian sugar mills operate differently. Their structure, priorities, and sales approach make it difficult for new importers to access sugar directly. Here’s why:

1. The Scale of the Industry and Global Demand

Brazil dominates the global sugar market, with major mills handling massive production volumes. These mills often prioritize long-term contracts with established international buyers rather than smaller or first-time importers.

Since they are not struggling to find customers, they rarely engage in direct sales to new importers. Instead, they work with trusted trading companies and institutional buyers with a proven track record.

2. Sugar Mills Do Not Export Directly

Brazilian sugar mills focus solely on production, relying on different sales channels to distribute their sugar:

• Selling to export cooperatives.
• Selling futures market quotas to investors or specialized trading firms.
• In rare cases, setting up a separate company to handle exports.

This means that if you’re trying to buy sugar directly from a mill, you will likely hit a dead end.

3. The Role of Trading Companies in Sugar Exports

Brazil’s sugar industry follows a highly structured commercial model:

Mills sell large quantities to global trading companies like Alvean, COFCO, and Sucden.
These trading firms manage sales, logistics, and financial transactions, ensuring a smooth process.
Most buyers must go through trading firms rather than dealing directly with mills.

For a new importer, attempting to bypass this system is often a frustrating and unsuccessful endeavor.

4. Risk of Unqualified Buyers

Brazilian sugar mills receive a flood of daily inquiries from potential buyers worldwide. However, many of these inquiries come from businesses lacking the financial strength or logistics capacity to fulfill large-scale contracts.

To filter serious buyers, mills and trading firms require:

Financial guarantees such as SBLC (Standby Letter of Credit) or DLC (Documentary Letter of Credit) from a Top 50 global bank.
A solid purchase history and long-term buying capacity.
Partnerships with recognized trading firms or established intermediaries.

By enforcing strict buyer criteria, mills reduce financial risk and ensure stable market conditions.

5. Price Control and Market Stability

Sugar prices fluctuate due to currency exchange rates, fuel costs, and climate conditions. To maintain price stability, Brazilian mills prefer structured contracts over direct sales to individual buyers.

If mills allowed unrestricted market access, it could lead to excessive speculation and price volatility. By working with verified buyers through established trading firms, they protect profit margins and maintain a predictable supply chain.

Price reference – sugar prices on the global market: https://www.investing.com/commodities/london-sugar

6. Efficiency and Long-Term Contracts

Large sugar mills prioritize:

Bulk and recurring contracts over small, one-time orders.
Streamlined operations with minimal bureaucratic overhead.
Guaranteed payments and logistics secured through trusted partners.

For a first-time importer, this means that securing a long-term agreement—or working with a reputable intermediary—is key to gaining access to Brazilian sugar.