Does Brazil Ethanol Price Affect Brazil Sugar Export? An Indonesians’ Perspective

Abstract

The research is financed by The Brawijaya University

Abstract

Besides the biggest ethanol producer, Brazil has been known as the largest sugar producer and exporter.  Different from the USA, ethanol from Brazil is made from sugarcane. The sugarcane can also be processed into sugar. Still, ethanol and sugar are not meant to substitute each other, although both are the product of sugarcane. But the apprehension may appear as one of those could be lack of stock. This ultimately leads to an increased price. An increase in sugar price is worthy for Indonesia, the largest sugar importer. The above situation urges a study to find out how far ethanol could alarm sugar export at Brazil as the primary producer for both. The result reveals that ethanol price does not affect Brazil sugar export and even the world sugar price. Brazil sugar export is noninterventionist from that situation. Factors influencing Brazil sugar exports are the country’s sugar production and domestic sugar demand. Despite this, world sugar price is affected by world sugar import, whereas world sugar export does not interrupt world sugar price.

Keywords: world sugar price, ethanol price, Brazil, world sugar export and import.

DOI: 10.7176/EJBM/11-25-09

Publication date:September 30^th 2019