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Posted on  

November 24, 2000

Brazil sugar supplies seen very tight in May 2001

Brazilian sugar supplies will be very tight at the start of the centre-south cane harvest in May 2001 due to an ethanol shortage and a smaller than expected cane crop recovery, a Brazilian sugar consultant said on Wednesday.

"The start of the season will be very tight because people will be producing alcohol," Plinio Mario Nastari, president of commodity analysts Datagro, told Reuters after addressing an International Sugar Organization (ISO) seminar.

He forecast only 600,000 to 700,000 tonnes of sugar stocks, controlled by a few producer groups, will be carried forward into the start of the next centre-south harvest in May.

Ethanol stocks are expected to shrink to 300 million litres by May 2001, from 1.6 billion litres a year ago.

Despite efforts to transfer 200 million litres of ethanol from Brazil's north east to the centre south region and imports of a similar volume, Nastari forecast supply shortages due to distribution bottlenecks and a sharp rise in prices.

Demand for fuel ethanol has been boosted by a sharp rise in oil prices while production of the sugar cane feedstock fell sharply this year due to drought.
 

 

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