Brazil ethanol prices seen low despite sugar spike

Reuters
Mon Aug 17, 2009 12:31pm EDT
By Inae Riveras - Analysis

SAO PAULO (Reuters) - The recent surge in sugar prices to their highest level in 28 years and growing demand for ethanol in Brazil are insufficient to support prices of the biofuel, which remain below production costs.

Ethanol and sugar prices are usually linked as they have to compete for the same cane. But as many mills face cash constraints they see ethanol sales as the only way of raising cash to pay debts, pressing down prices.

Read the full story