By the time this editorial is published, Brazil will have a newly elected President in charge. As the number one exporter on international sugar markets and given the commitments taken by both candidates to control domestic energy prices - including gasoline prices at the pump - there is very little doubt that Brazilian mills will favour sugar production, therefore, boosting the sugar/ ethanol allocation ratio. Although several analysts are anticipating a 45 (sugar)/ 55 (ethanol) ratio - resulting in about 38 million tonnes (Mt) of sugar being produced - for the upcoming 2023/2024 campaign (April/March basis), uncertainties remain and have the potential to be a game changer: a 1 error on the allocation ratio translating to 0.8 Mt of additional/reduced sugar availabilities. Given a world sugar surplus of 3 Mt, a 4 reduction in the Brazilian campaign allocation ratio would shift the world sugar surplus into a deficit.
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