Brazil Will Favor Sugar at 21 Cents, Morgan Stanley Says

Bloomberg Businessweek
January 31, 2012, 6:51 AM EST
By Isis Almeida

Jan. 31 (Bloomberg) -- Sugar millers in Brazil, the world’s largest producer, will favor production of sugar over ethanol with prices at or above 21 cents a pound, Morgan Stanley said.

Producers in the South American country can make either sugar or ethanol from the raw material sugar cane. The raw sweetener traded in New York was up 1.2 percent to 24.13 cents a pound at 11:04 a.m. London time on ICE Futures U.S.

“Strong gasoline demand in Brazil has also led to an increase in anhydrous ethanol demand, though economics still support sugar production over ethanol down to a sugar price of 21 cents a pound,” Hussein Allidina, head of commodities research at the bank, wrote in a report dated yesterday.

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