High sugar prices seen cutting into ethanol production

In Brazil, sugar fetching the highest prices seen in several years is expected to deter the amount of sugarcane diverted to ethanol production, eventually putting a squeeze on the local ethanol markets as well as those countries who traditionally import. FG/AGRO consultancy told a conference in Sao Paolo that ethanol production could drop to 27.2 billion liters for 2016/17 from 28.2 billion liters last year. If sugar production continues to shrink around the world, forcing even more cane to ethanol than this year, production could fall to 23.1 billion liters in the 2019/20.