On May 31st, according to the analysis of Garlico Czapp, the discounted sugar price of hydrous ethanol in central and southern Brazil remained at 16.48 cents/lb, while the spot price of raw sugar dropped slightly to 26.7 cents/lb. This means that the price difference between raw sugar and ethanol dropped slightly to 10.21 cents/lb, and the large price difference does not affect the current trend of the sugar market.
Because Brazilian sugar mills have already decided to maximize the proportion of sugar production this season, we estimate that the sugar-to-alcohol ratio will reach 47.5% this season. The key is whether the weather will allow smooth crushing and export of Brazilian sugarcane. As we predicted in our last report, production is running smoothly thanks to less rain in the first half of the month. But the rains in Brazil’s sugarcane fields at the end of May may cause 2 days of production interruption.
