Business Journal
© Reuters. FILE PHOTO: A sugarcane discipline in trend stage is seen at a farm in Jacarezinho, Brazil January 1, 2019. REUTERS/Marcelo Texeira/File Photo
By Marcelo Teixeira
NEW YORK (Reuters) -Global commodities trader Louis Dreyfus projected on Wednesday that Brazilian mills will divert a better-than-expected amount of sugarcane to ethanol manufacturing due to high energy prices, inflicting a low cost in world sugar gives.
Dreyfus sugar director Enrico Biancheri acknowledged in some unspecified time in the future of the Citi ISO Datagro sugar conference in New York that Brazil’s center-south (CS) mills would have completely 29 million tonnes of sugar in the unusual season that started in April, a stare that would maybe well well be in the low reside of analysts’ estimates up to now.
“At present prices the area is heading to a lack of sugar, due to a ethanol-oriented sever in Brazil,” Biancheri acknowledged, including that sugar prices will want to upward thrust to a top charge over ethanol prices to reason an prolong in sugar manufacturing.
Brazil mills own sure flexibility to trade cane allocation to sugar or ethanol, reckoning on market prices. Resulting from high energy prices, there used to be an expectation in the sugar market that mills would shift some cane to ethanol, but Dreyfus sees that shift as extra drastic.
As a comparability, U.S. dealer and analyst StoneX projected on Tuesday that Brazil CS mills would have 33.9 million tonnes of sugar, advance 4 million tonnes above Dreyfus’ estimate.
Biancheri acknowledged that ethanol sales are for the time being giving mills a monetary return that would maybe well well be such as a sugar label of 20.18 cents per pound. Sugar used to be procuring and selling on Wednesday on ICE (NYSE:) at 18.54 cents/lb.
