In a down market, sugar inventories rise in anticipation of a larger export cap.

Sugar inventories in Brazil are at a five-year high, as the country prepares to export more of the sweetener in the face of a global oversupply.

Inventories held by Brazil’s sugar mills totaled 18.7 million tons in March, up from 17.5 million tons a year earlier, according to data from the country’s sugarcane industry association, Unica.

The increase in stockpiles comes as Brazil gears up to export more sugar in the coming months. The country is the world’s largest sugar producer and exporter, and is expected to ship a record 37 million tons of the sweetener in the 2017/18 season.

With global sugar prices languishing at multi-year lows, Brazilian mills are ramping up exports in an effort to cash in on the country’s competitive advantage.

However, the increased exports could add to the already oversupplied global market and put further downward pressure on prices.

Sugar prices have been in decline for the past few years, due to a combination of overproduction and weak demand. The situation has been exacerbated by a recent surge in production from Thailand and India.

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