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The sugar mills in Brazil turned back to their favourite ethanol production as the gasoline prices have increased. Sugar production in the country is also likely to fall from expected production as mills are likely to allocate less cane for sugar.
Broker INTL FCStone cuts its projection for sugar production to 27.8 million tonnes from 29.5 million tonnes.
Earlier, it was projected that mills would use 40 per cent sugarcane in sugar production, but according to new estimation, they are likely to utilize 37.1 per cent sugarcane.
FCStone said, “This year prices of oil rose 35 per cent, whereas sugar fell 5 per cent, and hike in oil prices led to increasing values for gasoline in Brazil. Due to this demand and prices for ethanol raised.”
