Underlying a multi billion dollar sugar industry is a humble grass commonly known as sugar cane. In spite of the fact that it quite often grows well over six feet high unlike the lawn grasses it is related to, sugar cane is indeed a grass, in fact, the term ‘sugar cane’ encompasses a genus of grasses which is comprised of thirty six different species. Within these species, sugar producing nations (Brazil in particular) have bred various sugar cane strains to suit varying growing conditions and the production of specific products. Hybrid strains of sugar cane are the back bone of not only the sugar industry, but also the sugar ethanol industry, sugar ethanol being a widely used and highly viable alternative fuel derived from sugar cane.

The History of Sugar Cane

A native of tropical countries such as India and New Guinea, sugar cane developed in several different nations simultaneously, with different strains of sugar cane being successful in different regions. There is some argument over where sugar cane was first cultivated intentionally for the purposes of producing sugar, however there are records of sugar in India as far back as 3000 BCE.

Sugar cane traveled along with Buddhism from India to China in the 7th century CE, and the Chinese quickly became adept at cultivating sugar cane and making sugar. For a very long time, sugar cane, and sugar were known only in the eastern countries. Sugar cane was taken to the Middle East and Africa by traveling Arabian people, but it was not until the Crusades that this miraculous plant became widely known in the West. At first, both sugar cane and sugar were a rare commodity for westerners, and at one stage it was even said that sugar was more expensive than gold in London.

With the discovery of sugar cane by western populations, sugar cane plantations were eventually established in many British colonies, particularly Carribean ones. African slaves were used to work the plantations and the boiling houses in which sugar cane was processed into sugar.

The Dutch bought sugar cane to Brazil, and also used African slaves to man the first plantations and boiling houses, which were established in the northern regions of the country. Today Brazil is the world’s largest producer of sugar cane and sugar cane products, and many plantations, mills, and refineries are still operating in the northern regions of Brazil, though nowadays the labor is, of course, paid.

Growing Sugar Cane

Sugar cane is planted by hand, not from seed, but from cuttings called “setts”. These setts are half a meter to one and a half meters long, and have several buds growing along their lengths. When planted horizontally in furrows, watered and fertilized, these setts send up shoots within a few weeks. Each of the shoots is a new stalk of sugar cane.

Sugar cane requires a great deal of water to grow well, and does not take kindly to cold temperatures, infertile soils, or harsh chemicals. Though hardier strains have been developed, ideal growing conditions are flat, fertile soil with plenty of nutrients in a tropical or sub tropical climate.

If the setts are not disturbed during harvesting, and are well maintained, they can continue to grow for up to twelve harvests, though three to five is a more typical number. After the first few harvests, damage and old age begins to take its toll, and the new shoots are not as healthy or as rich in sucrose as the ones before them. It is at this stage that the whole field will often be ploughed, and new setts planted.

Harvesting Sugar Cane

When it comes time to harvest the sugar cane, one of two methods can be used. In some cases, human laborers work the fields, cutting the sugar cane off low to the ground and bundling the stalks up for their trip to the sugar mill. The work is back breaking and difficult, and good workers are worth their weight in gold to owners of sugar cane crops. Because sugar cane regrows after it is harvested, it is essential that the roots not be damaged when the cane is harvested. Clumsy workers can quickly destroy an entire field of sugar cane, costing the owner thousands of dollars or more.

When human labor is used to harvest sugar cane, it is not uncommon for the field to first be burnt. The flames quickly consume excess foliage, leaving just the stalks ready for harvesting. This is a safety measure for the workers, as it kills any poisonous snakes that may have been living in the field and it also makes it easier for the harvesters to see what they are doing without the visual impediment of dense leafy foliage to contend with, which cuts down on accidents considerably.

Another option is to harvest sugar cane using a machine. Large mechanical harvesters can travel up and down a field, harvesting the cane, stripping it of unwanted leaves, and bundling it tidily in the back of the harvester. Naturally there are some obvious advantages to this method, only one labourer needs to be paid, the harvester does not require meals or a place to sleep at night, and will not need a break every hour or two.

Fortunately for labourers who in many countries depend on the yearly harvesting season to make money, mechanical harvesters also come with their fair share of problems. To begin with, they are not very well suited to operation on uneven surfaces. Fields need to be flat in order for a mechanical harvester to be truly effective. Also, mechanical harvesters have been known to cause damage to the underlying roots by either harvesting the cane too roughly, or by crushing them under their heavy tires. Machines also require petrol, which is becoming an increasingly pricey commodity.

Processing Sugar Cane

After harvesting, sugar cane is processed at the sugar mill by washing the stalks, then shredding them with very sharp blades. Once the stalks are shredded, they are put through rollers to squeeze the juice out of them. What emerges from this process is a dark brown high sucrose juice commonly known as “raw juice”, and the dry sugar cane fiber known as ‘bagasse’.

Sugar Cane Products

Sugar cane is a deceptively versatile material, useful for making a wide range of products. Sugar, is of course an obvious one, and sugar ethanol has been growing steadily in popularity as a global fuel crisis sends nations looking for ways to wean themselves of a dependency on oil.

Sugar Cane Bagasse

For a long time, Bagasse was simply discarded and burned in the fields as a waste product. Nowadays bagasse finds a plethora of applications, both in the sugar mill and out of it. Many mills now burn the bagasse resulting from their sugar cane milling operations in the mill itself, and use the resulting heat to generate electricity which powers the mill. So much energy can be made in this fashion that it is not uncommon for there to be a surplus of power, which is then very often sold onto the national grid, making the sugar mill incredibly energy efficient.

Bagasse is also used as charcoal. Charcoaled bagasse is a clean burning product that provides a great deal of heat at a relatively low cost. It is easily stored, and can keep for much longer than traditional charcoal briquettes.

Some manufacturers are exploring uses of Bagasse in disposable tableware. When pressed into cups and plates, Bagasse makes for a strong, relatively durable product which can stand heat and moisture, and which biodegrades entirely in just a few months, making it an obvious choice for anyone concerned with the impact of traditional disposable dinnerware materials such as plastic and polystyrene. Bagasse tableware is also entirely freezer and microwave safe, making it much more convenient and versatile than traditional materials.

Molasses

A byproduct of the sugar refining process, molasses is used in everything from animal feed to health supplements. It has a sweet/bitter taste, and is full of healthy minerals such as calcium, potassium, magnesium, and iron. There are many different grades of molasses, some suitable only for animal feed, and others quite suitable for human consumption.

Brazilian Sugar

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As one of the world’s most widely traded commodities, the trading of sugar can be a complicated endeavor, with natural phenomena, political concerns, and other factors such as fuel prices all impacting heavily on the market. Much sugar is traded on futures markets, by which supplies can be secured years ahead of time. This is advantageous for large corporate entities which require secured ongoing sugar supplies. For those requiring more flexibility, or who enjoy playing the market, spot trading provides the ability to purchase sugar when the timing is right, or to take advantage of short term dips in the market.

Sugar Spot Trading

Spot trading involves purchasing a currency or commodity (in this case, sugar), at the current market rate for immediate delivery. Unlike other forms of sugar trading, in which shipments are often sent over a period of many months, in spot trading, sugar is reserved for the soonest possible delivery and payment is made in relatively short order. Sugar spot trading therefore involves relatively small amounts of product which have already been produced, unlike traditional sugar trading which quite often concerns sugar that has yet to be grown, yet alone refined.

2008/2009 Trading Trends

Spot trading is on the rise amidst one of the largest global sugar surpluses in recent history. It is estimated that Brazil and India alone will produce a combined amount of around 60 million tons in the 2008/2009 period, and a global sugar surplus of around eleven million tons is predicted for the same period. For this reason, sugar prices are in something of a depression at the present time, though shipping costs, rising on the back of increased fuel prices could see export prices rising into the future.

A quick breakdown of major sugar exporting countries goes thus:

Brazil 20.9 MT
Thailand 5.8 MT
India 4 MT
Australia 3.9 MT
SADC (Southern African Development Community) 2.3 MT
Guatemala 1.9 MT
Europe 1.2 MT

Brazil retains its title as the largest exporter of sugar, exporting roughly two thirds of its total production. Though India’s production continues to climb to comparable levels with Brazil, exports have been limited due to fears that the sugar market could become saturated and prices could fall below profitable levels if large amounts of Indian sugar were to be exported. In 2007, India’s exports were a mere 1.34 million tons, but this number is set to climb in the coming years as India increasingly seeks export markets for its sugar.

Sugar Trading Tarrifs

Global sugar trading is further made interesting by the many countries which place tarrifs on imported sugar in order to provide stimulation to local sugar producers. It is not uncommon for governments to subsidize local sugar production in order to encourage local production and consumption, even during times when it would ostensibly make sense to take advantage of lower prices available on the export market.
Some countries use their sugar tarrifs to restrict the product of certain countries, whilst encouraging others. For instance, the United States has no tarrifs on sugar imported from third world nations, a policy which aims to stimulate economic growth in those regions.

Sugar Commodities Exchange

Sugar is traded on several commodities exchanges. Some of the more popular exchanges include: Intercontinental Commodities Exchange (ICE) – formerly the NYBOT, the London Futures Exchange (LIFFE), Commodity Exchange Inc (COMEX), and the Coffee, Sugar, and Cocoa Exchange (CSCE).

Anyone with a vested interest in sugar trading would be well advised to subscribe to these markets, as they are an irreplaceable source of data not just on current market value, but also on trends which can have a strong impact on future trading decisions.

Direct Sugar Export

Nowadays sugar importers often buy directly from the sellers (not the market). We work with several US and EU hedge funds who own Brazilian sugar allocations in large quantities. We also source sugar directly from a Brazilian jointly owned commercial enterprise, which is in control of over 200 sugar mills. Lastly, we also work with individual Brazilian sugar mills. Because of that, we are able to fill an order of any reasonable size, starting with the minimum 12.500 metric tons to multi million ton orders. Please contact us through the below form and let us know your exact requirements. We will get back to you with sugar availability and price quotation shortly

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Brazilian Sugar

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Brazilian sugar is grown in two major regions in Brazil, the larger of these is the Sao Paulo region. Located in the center south of the country, it is known for its vast fertile plains, much of which have been turned over to sugar cane production over the past decades as sugar has become an increasingly viable crop, and as interest in sugar ethanol as a form of alternate fuel has also grown.

The other major growing region is in the northern states of Pernambuco and Algolas. Though these states are much less fertile and boast rugged terrain which is not nearly as well suited to the cultivation of sugar cane, they are the historical home of sugar production in Brazil. They are also the main regions of expansion, as the Sao Paulo region recently cut permits for new sugar mills in that jurisdiction due to environmental concerns, leaving would be developers to seek other regions in which to build their mills.

Global demand for sugar has continued to increase over the years, with population growth and the growing popularity of the Western style diet accounting for much of this growth. Production has also increased in many countries, and India in particular is now a solid rival to Brazil in the production stakes, though its exports are significantly lower than Brazil’s.

The great majority of Brazil’s sugar exports are in the form of VHP raw sugar, a raw sugar product that has undergone some processing to increase its polarity. VHP raw sugar contains no less than 99.4% sucrose, is a light brown color, and is in great demand by refineries around the world. VHP raw sugar is a Brazilian invention, created in 1993 as an answer to the inherent inefficiency of carting large amounts of raw sugar around the world only to lose a great deal of it to the refining process due to the fact that so much of it was made up of liquids and contaminants. Refineries soon saw the benefits to using a high sucrose raw material instead of traditional raw sugar, and the Brazilian sugar industry went from strength to strength after its invention.

VHP sugar is made by boiling the raw cane juice to concentrate it, allowing the sucrose crystals to crystallize in the solution, and then centrifuging the material. The products of the centrifugal process are VHP sugar, and molasses, which can be used for animal feeds or human health supplements depending on the grade of the product.

Brazil’s domination of the global sugar market has arisen through both agricultural prowess, technical innovation, and an emphasis on research and development. Though other countries, such as India, are now beginning to approach Brazil in production levels, they still lag behind the sugar giant in terms of growing practices, production quality, and biochemical prowess.

Brazil has always placed great importance on researching sugar, and even went so far as to sequence the sugar cane genome. As a result of this, and other related endeavors, there are now hundreds of different strains of sugar cane in Brazil. These strains have been designed for greater sucrose yield, for more successive generations of growth (sugar cane is usually left to grow for several generations, being harvested each season by cutting off the cane, but leaving the roots to grow again and again in successive seasons until the sucrose content of the newly grown cane dips below acceptable levels, or the roots become too damaged to grow healthy sugar cane, at which point the field is tilled and fresh cane sown), and to grow in difficult conditions.

Equal attention has been paid to the physical processes associated with milling sugar cane and refining sugar. Most Brazilian sugar mills have efficiency teams whose job it is to streamline and economize all processes in the plant. Recycling is also a high priority, with the sugar cane fiber often burned to power the facility. So efficient are Brazilian mills that they often manage to sell power onto the national grid because the burning of the bagasse (a name given to the fibrous part of the sugar cane discarded after crushing) provides more than enough energy to power the plant.

Purchasing Brazilian Sugar

The majority of Brazilian sugar is sold on the futures market before it is grown, but it is possible to occasionally secure smaller amounts of sugar on a spot basis, which means that the current market price is paid for a relatively small shipment. Spot prices can fluctuate wildly based on world events, domestic trends, oil prices, and other factors.

Brazilian sugar is usually sold CIF, meaning Cost, Insurance, and Freight. The price therefore includes the cost of the sugar, insurance on it until such time as it arrives at the destination port, and the freight to get it there. The seller must organize freight with a suitable carrier, and organize SGS inspections at the port of departure. It is standard practice for shipping documents, SGS certificates, and other relevant documentation to be presented before the seller is paid for the goods. To achieve this, a fully funded letter of credit is the standard financial instrument used in sugar trading, though there are other payment methods available to interested parties at the seller’s discretion.

Spot sugar trading is advantageous for buyers looking for smaller amounts of sugar in a timely fashion, or those who wish to take advantage of a dip in prices to boost their sugar reserves. If you would like more information on purchasing Brazilian sugar, please contact us to discuss your needs.

Brazilian Sugar Exporters

We source sugar directly from a Brazilian jointly owned commercial enterprise, which is in control of over 200 sugar mills. We also work with several US and EU hedge funds who own Brazilian sugar allocations in large quantities. Lastly, we also work with individual Brazilian sugar mills. Because of that, we are able to fill an order of any size, starting with the minimum 12.500 metric tons of sugar to multi million ton orders. Please contact us through the form below and include your specific requirements. We will get back to you with sugar availability and price quotation shortly

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Brazilian Sugar

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