Brazil is the world leader of the sugar industry, and in 2007 – 2008 is expected to produce over 32 million tonnes of sugar. Brazil and India have been neck in neck in recent years, with India’s sugar production increasing rapidly, however for the 2007 – 2008 period Brazil is expected to retain its title as the highest sugar producing nation in the world as India’s projected output dips to 26 million tonnes, 6 million tonnes behind Brazil.
With sugar production in 2006 also topping 30 million tonnes, Brazil is demonstrably a consistent high performer when it comes to sugar production. Interestingly enough, the sugar exported from Brazil (over twenty million tonnes per year) represents just a fraction of the total sugar cane crop grown there. Around half of the yearly Brazilian sugar cane crop is held for ethanol production rather than sugar, which means that Brazil could quite easily almost double its sugar output if it so decided. It would even be quite possible for Brazil to flood the market with cheap sugar, however this is highly unlikely to ever occur, as it would devalue Brazilian sugar severely. If one doubts the power that Brazil has in the sugar market, one need only look back as far as 2002, when Brazil sold a record amount of sugar on the market after a particularly good growing year, and as a result world sugar prices tumbled as low as five cents per pound.
Growing Sugar In Brazil
Most of the sugar grown in Brazil is produced in the Sao Paulo region, in the North-Northeast of the country. The land in this region is highly fertile, and largely flat, which makes it a prime region for both growing and harvesting sugar cane. It is estimated that between 60 and 70 percent of all sugar made in Brazil is grown in this region. A large portion of this sugar cane is also used in ethanol production, and it is estimated that around 90 percent of all sugar-ethanol produced in Brazil is produced from the sugar cane grown in the Sao Paulo region.
Sugar cane in the Sao Paulo region is usually harvested from the beginning of May through to the end of November. In cases of extreme shortfall, the harvesting season may begin a few weeks early. The best time to buy sugar is in the harvesting months when it is relatively plentiful. From December to April stocks begin to be harder to find, and more expensive to purchase. For this reason many buyers lock in a revolving multi shipment deal with Brazilian suppliers that will last them through the off season. Many buyers also purchase orders of sugar one or two years before they are even planted, which is one reason why Brazilian sugar may be hard to obtain for the newcomer to the sugar market.
The second, smaller sugar producing region in Brazil lies in the Center-South region, in the states of Pernambuco and Agolas. The terrain here is much more hilly, and the soil quality is poorer than in the north. The sugar cane does not grow as well here, and producers are more reliant upon manual labour to harvest it. This region mainly supplies the domestic sugar market, and has a harvesting season running from September through to May.
Grades of Brazilian Sugar
Although Brazil produces vast amounts of sugar every year, the majority of it is unrefined centrifugal sugar which ranges from around ICUMSA 400 to ICUMSA 1500. In most cases this sugar is purchased by buyers who then refine it in their own plants in their own countries. Those seeking Brazilian ICUMSA 45 (highly refined sparkling white sugar) may find it difficult to obtain, as very little sugar is actually refined in Brazil. Small amounts may be possible to source, but larger orders are much more difficult to fufil, especially if one requires them quickly. ICUMSA 150 sugar is more readily available than ICUMSA 45, and may be a viable alternative for buyers who do not require as refined a product as ICUMSA 45.
Brazilian sugar export
Much of the sugar produced in Brazil is actually also consumed in Brazil. Brazilians are well known for their love of sugar, and they consume vast amounts of the product every year. Sugar is not considered to be a luxury in Brazil, rather it is viewed as an essential staple, and market research indicates that Brazilians will purchase sugar regardless of fluctuations in its price. For quite some time, the biggest consumer of Brazilian sugar was the Brazillian people themselves, but nowadays exports have risen to the point where even the sugar loving Brazilians cannot consume more than is sold offshore.
The United States purchases the most Brazilian sugar of any country in the world, buying over twenty percent of Brazil’s sugar exports in recent years. The next major purchasers of Brazilian sugar are Argentina and China, in that order, who both purchase just under ten percent of the exported sugar. Other major trading partners include Japan, France, Nigeria, South Korea, Italy, and Algeria.
Why Am I Having Trouble Buying Brazilian Sugar?
It seems counter intuitive that purchasing sugar from the largest sugar producing nation in the world should be difficult, but many newcomers do have trouble obtraining suppliers of Brazilian sugar. The main reason for this has already been mentioned, and that is the fact that Brazilia sugar is traded heavily on the futures market, and in many cases, sugar is sold a long time before the cane is even planted. When it comes time to harvest, the bulk of the sugar is already spoken for and is sent directly to major buyers, leaving newcomers with whatever excess sugar there is left. Newcomers need to be prepared to purchase relatively small amounts of Brazilian sugar, as these are more easy to come by, and if a buyer wishes to secure sugar into the future they should also be prepared to make an investment in future sugar.