Sugar Week: BP Bunge presents perspectives on the sugar, ethanol, and electricity markets

Last Wednesday Morning (25), BP Bunge Bioenergia, one of the Brazilian leaders in the ethanol, sugar, and bioelectricity markets, hosted an event in São Paulo. The event brought together customers, suppliers, and business partners to discuss the company’s perspectives on the sugar-energy sector.

“We are currently in a very important moment for our industry, where we have a rare combination of promising prices and volumes. Brazil has emerged as a leading player in the global sugar market and is expected to maintain this position in the coming months. Ethanol, which has already played a key role in reducing carbon emissions from land transport, also has the potential to help decarbonize air and sea”, said Ricardo Carvalho, Commercial and Origination Director at BP Bunge, during the event’s opening.

Afterwards, Luciana Torrezan, the Market Intelligence Manager of the company, presented an overview of the sugar, ethanol, and energy markets. One of the projections mentioned a decline in global sugar production, while the consumption rate is expected to grow by 1.1% in the 23/24 process, resulting in a shortage of 2.8 million tons of sugar. In this scenario, Luciana expressed that the performance of the Brazilian harvest during the period gives the country a competitive edge in the global market.

“The impact of climate change has been felt by major global sugarcane producers, such as India and Thailand. However, in Brazil, the forecast is that the productivity levels in sugarcane fields will reach a record high. It is expected that around 660 million tons of sugarcane will be available for crushing”, explains.

Luciana believes that the climate is crucial in the process of sugarcane production and should determine the final volume of sugar produced in the country, but the projections indicate an increase of approximately 21% in the 40.9 million tons of sugar production in the upcoming quarters compared to the 22/23 harvest. “Brazil is expected to dominate around 65% of the raw sugar export operations in the coming quarters. One of the challenges to be overcome in this context is the logistical issue, which must provide solutions that include the shipment of the entire volume of sugar that we will have available”, she said.

Scenario for ethanol

During the event, another point discussed was the contribution of ethanol to the challenges of the energy transition, including the issue of low-carbon mobility. In this sense, Tomás Cardoso, director of Strategy, New Business and Innovation at BP Bunge Bioenergia, spoke about the perspectives regarding the future of the sector, where he highlighted the expectations that exist around operations involving the production of sustainable aviation fuel (SAF).

“There are already some routes on the market aimed at the production of SAF, such as HEFA (based on vegetable oils and fats). However, the process known as ATJ (alcohol-to-jet), which utilizes ethanol as a raw material, is emerging as the most promising due to its future viability. This is mainly due to the abundance of this biofuel worldwide and its relatively low cost. It is an innovation that the entire market has been talking about, as the potential for a positive impact on our sector is If we reach at least a 3% blend of ethanol-based SAF in global aviation fuel, we are talking about a demand consistent with the volume produced during an entire Brazilian harvest of this biofuel,” said Cardoso.

Macroeconomics: focus on agribusiness

The schedule also included a lecture by economist José Roberto Mendonça de Barros, who provided an analysis of the current macroeconomic scenario, highlighting the positive performance of Brazilian agribusiness, which has contributed to the country’s economy achieving historical indicators in 2023, such as the balance of trade, which is expected to reach an unprecedented level of US$96 billion.

According to Mendonça de Barros, the outlook for the coming years is that the agricultural sector in Brazil will continue to grow at a rapid pace and be the main driver of the country’s economic growth. He believes that this movement will intensify through different paths, including the issue of decarbonization, which has become a global concern. “As Brazil continues to improve its position in the world of commodities, the process of decarbonization should accelerate this trend. The production of new energy, new fuels with a lower carbon footprint such as SAF, among others, should intensify the creation of value for Brazilian agriculture”, he said.