HS-全球-农业行业-全球农业：糖的复苏之路漫漫-527-24页.pdf

Brazil to maximize sugar production that could churn out an additional 8-10mt of sugar (c12mt

at max capacity of 50% sugar 50% ethanol). The additional sugar production from Brazil will be

more than enough to offset 8-10mt of deficit forecast prior to the COVID-19 outbreak.

As a large portion of sugar is used in beverages and confectionaries, sugar demand could be

affected by production shutdowns. The quantum of impact is less clear at this point, however,

some industry estimates suggest as much as 5% decline in countries where lockdown has been

in place. Assuming a 2-3% drop in global sugar demand for 2020, this would add c3-5mt to

surplus. On the other hand, production rebound in India could add another 3.5-6.5mt. Hence we

believe 2020 and 2021 will be surplus years for sugar which caps price recovery.

We forecast ethanol prices based on oil implied gasoline prices. We use long-term regression

analysis to forecast oil implied US gasoline prices, then arrive at the import parity price at Brazil

and adjust taxes and freight to calculate the prices at the pump. Our calculation based on the

assumptions below suggest that ethanol price could recover from the current lows, still will be