Pricing
Sustainable communities...
A fair deal for all...
Reliable supply chain...
All in it together...
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Partnerships for the long run.
Fair Pricing for the Farmer
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Approximately 70,000 independent farmers supply around 40 percent of the cane processed by Brazilian sugarcane mills. To help ensure fair and equitable relationships between growers and millers, these groups established an innovative sugarcane payment system in 1999.
This voluntary program is overseen by a non-profit association, known as Consecana – the Council of Sugarcane, Sugar and Ethanol Producers in the State of São Paulo. The group represents both sugar and ethanol processors (UNICA) and sugarcane growers (ORPLANA), and its primary objective is to share risks equitably. The Consecana payment system is based on two fundamental principles:
The price paid to cane producers is proportional to their share of industrial revenue. On average, sugarcane production accounts for 60 percent of total sugar and ethanol production costs. Therefore, sugarcane growers receive around 60 percent of the agro-industrial revenue.
The industry pays more for sugarcane with higher sucrose content. The value of sugarcane is based on the so-called Total Recoverable Sugar (or ATR in Portuguese). ATR corresponds to the amount of sugar available in the raw material minus the losses in the manufacturing process.
The money sugarcane growers collect depends on the prices for sugar and ethanol sold by processors in domestic and foreign markets. So transparency is crucial to the Consecana model.
Market pricing
In order to evaluate the current sugar price, viewing of trading markets such ICE, LIFFE or Bloomberg will provide you with an indication. Please note, that additional costs must be added to this price such as shipping, insurance and commissions to give you an overall price.
How we operate
We only deal directly with end buyers who are usually existing buyers of sugar. We do not use brokers or use the internet to sell our commodities. We always like to meet our buyers in person normally in London or the Isle of Man and happy to discuss requirements for the forthcoming year.
It is always our intention to produce sugar based on a long term commitment and it is very unusual for us to sell small one off consignments.
All of our sugar is grown and produced to order we do not speculate and hold sugar inventory in our warehouse.
We always carry out due diligence on our customers, which will include obtaining of bank references and trade references ensuring that the buyer has previously purchased sugar.
Once we are satisfied that the buyer has the financial ability to pursue a contract, which is a Bank Commitment letter form a Prime Bank. This has the principal objective of ensuring that buyers can perform without us entering into protected discussions where there is no realistic commitment or ability to buy from us.
Our bank will confirm and provide confirmation of our ability to perform. Furthermore we will provide all of the necessary confirmations such as export registrations from Brasil to support our ability to supply sugar.
At this time we are happy to arrange for you to visit the mill if that is required by the Buyer.
We then consider the available crop to us, type of sugar required, production schedules, shipping terms that are available to meet a potential purchase and outline a proposed schedule. After the preliminary discussions are carried out we then move to contract.
After which the Bank will issue any financial instruments that are required. Once the banking is in place we then commence production. Usually within 8 weeks of production we are ready to load the first consignment for delivery under the terms of the contract.