Brazil is the largest producer and exporter of sugar worldwide. Exports are projected to surpass 1.8 million tons to 26.1 million on steady higher demand and greater exportable supplies. However, a smaller amount of sugar is being converted to Ethanol in Brazil. Currently, 57% of Brazil’s sugar is converted to Ethanol, which is down from 59% the previous year.
Drought conditions in India have lowered production, which is projected to decline 18% this year, while production in Thailand and China are both set for large increases.
One interesting facet of the ethanol market comes in the form of exports from the United States to Brazil. With Ethanol currently priced lower than gasoline and sugar production down due to drought, more of Brazil’s sugar is being used for sweeteners. Ethanol producers in the United States have taken advantage of strong corn yields to export Ethanol to parts of Brazil. Some estimates suggest that 500 million liters of Ethanol will help to meet demand in the northern regions of Brazil.