Fitch Ratings says new Brazilian policies won’t help ethanol very much

In Brazil, recent initiatives announced by the Brazilian Government to support domestic ethanol production industry will not materially change industry fundamentals, as the limited size of the proposed tax breaks can result in only minimal cash flow improvement and marginal deleveraging, according to Fitch Ratings. Fitch highlights that companies with higher production mix flexibility, and the companies whose strategy is more focused on ethanol production, should benefit more by the recent measure, assuming sugar prices remain depressed.