Sugar-Ethanol Parity Calculator

The sugar-ethanol parity is the ICE No.11 price level at which a Brazilian sugarcane mill is indifferent between directing cane to sugar or hydrous ethanol production. When ICE No.11 is above parity, sugar is more attractive. Below parity, mills shift production toward ethanol. Around 40% of Brazilian cane output can be flexibly allocated between the two routes.

The CONSECANA methodology (the São Paulo cane pricing system) defines conversion ratios between ATR (theoretical recoverable sucrose) and each product. The standard conversion is approximately 1 litre of hydrous ethanol per 0.643 kg of ATR, and 1 kg of crystal sugar per 1.043 kg of ATR. The parity factor of ~2.05 L/kg converts a litre price of ethanol into a kilogram-equivalent sugar price, allowing direct comparison.

CEPEA (Center for Advanced Studies on Applied Economics) is a Brazilian agricultural research institution that publishes widely used reference prices for commodities including hydrous ethanol (anhydrous ethanol used as fuel). The CEPEA Paulínia hydrous ethanol price (BRL/m³) is the standard benchmark used by mills and traders for sugar-ethanol parity analysis.

ICE No.11 raw sugar is priced in USD, while Brazilian ethanol is priced in BRL. To compare them on a common basis, you must convert the sugar price into BRL/kg. When the BRL weakens (higher USD/BRL rate), the BRL value of sugar rises, making sugar production more attractive to mills relative to ethanol. Exchange rate volatility is therefore a key driver of mill cane allocation decisions.

This calculator uses the standard simplified CONSECANA parity conversion. In practice, mills also consider working capital costs, storage, ethanol inventory carry, seasonal ATR variation, and individual mill processing efficiencies. The result gives a useful directional signal but should be combined with real-time market data for operational decisions.