Falling fuel prices, weak currency drive Brazil switch from ethanol to sugar
NEW YORK, March 23 (Reuters) – Brazilian mills are expected to make a sharp switch from ethanol to sugar production in the new season kicking off in the world’s largest sugarcane producer, as falling gasoline prices and a weak currency reduce the biofuel’s appeal, analysts said.
Mills in Brazil have the flexibility to partially switch cane toward sugar or ethanol production, depending on market prices. For the last two years, they have allocated an all-time low amount of cane for sugar, around 34%, as ethanol gave them higher returns.
By Marcelo Teixeira via Nasdaq