PERSPEC 2025-SUGAR/CEPEA: Brazil's leadership in foreign trade should be consolidated in 2025

Cepea, 02/01/2025 – Brazil’s leading position in international sugar trade will be consolidated in 2025, a year in which prices are expected to remain at a good level in both the domestic and foreign markets. In the domestic market, Cepea researchers indicate that prices should remain at favorable levels, particularly due to the possible arbitrage between the domestic and foreign markets. It is estimated that a significant portion of exports has already been fixed at high price levels over the last few months. In addition, the economy should continue to grow, albeit at a slow pace, due to macroeconomic instability, which should be enough to absorb the supply directed to the domestic market. In the global market, demand from emerging markets, such as Pakistan and Indonesia, reinforced by the low replenishment of global stocks in the last two years, may sustain prices at levels above 18 cents per pound on ICE Futures (New York Stock Exchange). Historically, the decline in the stock/consumption ratio has been one of the main factors in rising prices, which should benefit Brazilian exports, in addition to the expectation that the exchange rate level may also remain high. Trade tensions between global powers, such as the United States and China, may open up new opportunities for Brazil, both in the sugar and ethanol markets. In short, the outlook for the sugar market in the Center-South region of Brazil for 2025 is challenging but promising. With robust global demand and the ongoing need to adapt to climate and market conditions, Brazil remains consolidated as an undisputed leader in sugar production and exports. Source: Cepea (www.cepea.esalq.usp.br)