Of all imported sugar (cane or beet sugar and chemically pure sucrose, in solid form), Brazil is the world’s leading supplier.
From 2021 to 2022, Brazilian exports of this type of sugar increased 20%, to 11,004 million dollars, according to data from the Brazilian Ministry of Economy.
Which countries consumed the most Brazilian sugar in 2022? China ($1,693 million, +20% year-on-year), Algeria ($773 million, no percentage change), Nigeria ($639 million, +7%), Morocco ($636 million +59%) and Canada ($505 million, +16 percent).
Other major sugar exporters in the world are India, Thailand, Germany, France and Mexico.
Regionally, the sugar and automotive sectors are the only ones excluded from free trade within Mercosur (comprising Brazil, Argentina, Uruguay and Paraguay).
There is no timetable for the inclusion of sugar in the free trade regime, although talks on the subject resumed in 2017.
Since the creation of Mercosur, there have been plans to incorporate sugar into the Customs Union and an Ad Hoc Group was created for that purpose.
Brazil believes it is time to move towards a gradual liberalization of sugar trade in Mercosur, as reported by the Brazilian government.
According to the World Trade Organization (WTO), Brazil had initiated a dispute in that organization (No. DS579) against India on sugar cane and sugar subsidies.
Imported sugar
With India’s ethanol program, the issue of sugar export subsidies could be mitigated.
In addition, 90% of Indian sugarcane producers are marginal and own little land.
However, in Brazil, sugarcane producers in the northern and northeastern states received a direct subsidy, the Regional Producer Subsidy.
India looks forward to friendly bilateral talks to resolve this issue that would benefit both countries.
In Brazil, the BNDES Program to Support the Sugar-alcohol Sector is a further initiative to support the fight against the economic effects of the coronavirus pandemic, directly targeting companies in the sugar-alcohol sector that have fuel ethanol storage activities and have revenues in excess of 300 million Brazilian Reais.
BNDES has announced the launch of a new program called the Sugar and Alcohol Sector Support Program starting in August 2020 to support the industry facing challenges due to the coronavirus crisis.
Governmental support
The program is aimed at companies in the sugar-alcohol sector that carry out fuel ethanol storage activities to ensure that there are no depreciation effects on fuel prices.
It is an integrated action with other banks, through co-financing, to support these companies in the need for liquidity generated by the crisis.
With this, the BNDES seeks to minimize the risk of energy shortages in the post-pandemic period.
While the credit line will be for US$ 600 million, it will be contracted through a consortium of private banks led by Banco do Brasil.
The program promotes the maintenance and replacement of jobs in the sector.
It also preserves environmental sustainability, as ethanol is a clean and renewable energy source. The operation will have a term of 24 months, with a grace period of up to 6 months, and the guarantee will be the stock of ethanol that each plant has.
