Sugar may need to drop further to spur Brazil to make ethanol

February 14, 2013

Isis Almeida – Bloomberg, 02/14/2013

Sugar may need to drop further to spur millers in Brazil, the world’s largest producer, to make more ethanol at the expense of the sweetener when the 2013-14 season starts there in April, according to Macquarie Group Ltd.

Futures traded on ICE Futures U.S. in New York, down 7.6 percent this year, may need to average 17 cents to 18 cents a pound when sugar cane processing starts in the center south, Brazil’s main growing region, Kona Haque, an analyst at the bank in London, wrote in a report e-mailed today. Sugar for May delivery was down 1 percent at 18.02 cents a pound.

Millers in Brazil use raw material sugar cane to make both the sweetener and the biofuel. The price of hydrous ethanol, the 100 percent biofuel used in Brazil’s flex-fuel cars, climbed above that of sugar on Feb. 7 for the first time since April 2011, according to Kingsman SA, owned by McGraw-Hill Cos. That spurred speculation millers would make more of the biofuel.

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Brazil set to lose out as Thailand meets Chinese sugar demand

May 22, 2012

Isis Almeida and Supunnabul Suwannakij – Business Week/Bloomberg News, 05/22/2012

A delay in harvesting the sugar cane crop in Brazil will see the world’s largest producer lose market share in China, set to be one of the season’s biggest importers, as Thailand increases its shipments to the Asian nation.

Thailand is forecast to ship 600,000 metric tons of raw sugar to China in the first half of the year, according to Thai Sugar Trading Corp., the country’s largest exporter. That would be the most since at least 2005 and almost a fifth of all the sugar China will need to buy this year. Last year, its shipments to China totaled 277,572 tons of sweeteners, according to Thailand’s Office of Cane & Sugar Board.

“Thai sugar is quite competitive in Chinese markets thanks to its proximity, making Thai sugar prices attractive even when combining cheap freight cost with a high sugar premium,” Piromsak Sasunee, chief executive officer of Thai Sugar Trading, said by phone on May 16.

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