Bloomberg News

Brazil Area’s Sugar Millers Seen Directing More Cane to Ethanol

June 19, 2013

Sugar millers in Brazil’s center south, the main growing region of the world’s biggest producer, may direct more cane to making ethanol than currently forecast because rains are delaying the harvest and limiting ethanol supplies, according to the International Sugar Organization.

The share of cane directed to making the biofuel in the 2013-14 season that started there in April may turn out to be higher than the 53 percent currently forecast, Leonardo Bichara Rocha, a senior economist at the ISO, said in an interview in London today. Last year, about 50 percent of all the cane was directed to ethanol production, he said.

“Rains are interrupting the harvest and the price of ethanol has risen,” Rocha said. “There’s a current tightness in the ethanol market.”

Brazil makes both sugar and ethanol from raw material sugar cane. Sales of ethanol have been more advantageous than sugar as prices for the sweetener slump due to excess supplies. The global sugar surplus will be a record 10 million metric tons in the 12 months ending Sept. 30, the ISO estimates.

“Even if the center south produces less sugar because of ethanol, the market is unlikely to rise because of the surplus,” Rocha said.

To contact the reporter on this story: Isis Almeida in London at ialmeida3@bloomberg.net

To contact the editor responsible for this story: John Deane at jdeane3@bloomberg.net


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