Brazil should continue to be a protagonist in the international sugar market in 2025, even with the climatic difficulties that have impacted the sugar energy sector in the current cycle of crushing. This is the conclusion of the president of SCA Brazil, Martinho Seiiti Ono; the director of Alvean for Brazil, Júlio Adorno; and the director of Archer Consulting, Arnaldo Corrêa.
The three participated in the ninth edition of the Live series “Conexão SCA Brasil”, broadcast last Tuesday (19).
According to experts, although trade flows in the first half of next year are vulnerable to supply shocks, global dependence on Brazilian products will continue to be robust, even more so if expectations regarding the good performance of production in Brazil are not confirmed. Asia and the European Union.
Sugar prices in the coming years
Regarding the sugar price forecast, the director of Archer Consulting presented a study of the last 20 years, whose calculation base takes into account New York prices, transforms them into reais per ton and makes a final adjustment taking into account the Broad National Consumer Price Index. Index (IPCA).
“This gives us a clearer idea of how prices have moved over these decades. From 2004 to 2024, only 10% of the time the market was above R$ 2,956.00 per ton, and 90% of the time it was R$ 1,609.00 per ton. They are indicators that serve as a parameter for plants to evaluate whether or not it is time to set prices,” observed Côrrea.
Regarding international sugar prices, which varied between US$ 17 and US$ 23, with expectations of fluctuating between US$ 19 and US$ 25 per ton, the expert believes that in the 2025/26 and 2026/27 harvests the index should increase.
“We have the potential to increase this price between 300 and 400 points. In other words, that level of 18 cents per pound will not be maintained,” said Corrêa.
Impacts of Donald Trump’s election
During the live show, the three directors discussed the election of Donald Trump in the United States and the effects of this on global commodity markets.
Arnaldo Corrêa analyzed some points defended by the next American president, such as the increase in tariffs on imports of Chinese products.
“In short, it is necessary to understand that the United States and China live in symbiosis, that is, one needs the other. China has the largest dollar reserve on the planet. If you wanted to use this reserve in the market as a retaliatory measure for tax increases, you would collapse both economies. “There will be no winners in a possible trade war between the two countries.”
However, Corrêa added that an intensification of trade between the world’s two most powerful nations could benefit Brazil to some extent. “Brazil can gain space in grains, which China would no longer buy from the United States and would come to us. So here comes an important point about how the price of corn ethanol will be set to respond to this eventual process,” he stated.
Grinding perspective
The three experts also made projections on the grind. According to SCA Brazil, at the end of the 2024/25 season, this index could vary between 606 and 608 million tons.
The level considers water deficits of around 400 to 500 millimeters in all the sugar cane regions of the country and the large fires that affected 665 thousand hectares of sugar cane throughout Brazil, of which, of that total, more than 465 thousand hectares were destroyed. They were in São Paulo. , the main producing state.
According to Martinho Ono, the index of Tons of Sugarcane per Hectare (TCH) has been showing a downward trend. The average accumulated TCH at the end of October was 80.1%a drop of 10.4% compared to 89.4% verified in the same period of 2023.
According to him, at the end of the harvest there will be an expansion of the sugarcane surface, reaching 7,725 hectares, an increase of 3.3% compared to the previous year.
The SCA executive emphasized that the problems encountered in the current harvest will impact the next agricultural cycle, in 2025/26, in which it is expected to process between 565 and 585 million tons of sugar cane.
“There will be problems of uneven germination, sugarcane with lower TCH, especially in the first half of the harvest, death of shoots, poorer planting quality and delay in plant development and pests/diseases. In short, in 2025 it should be necessary to replant more and less area available for harvesting,” Ono said.
