Brazilian sugar stocks may drop 50% on ethanol production push

In Brazil, a forecast of sugar surplus may drop up to 50% if millers put more cane towards ethanol production. Currently, sugar surpluses are expected around 9.7 million metric tons, and next year will see a surplus of 5.5 million tons.

However, says Giovana Araujo, an analyst at Banco Itau BBA SA, “any changes in the mix in Brazil toward ethanol would easily eliminate half of the sugar surplus… that’s the reason this surplus is not translating into lower prices.”