Sugar prices will rise next year as record production in Brazil and Russia isn’t expected to exceed demand, said Cosan SA Industria & Comercio, which jointly controls the world’s largest sugar-cane processor with Royal Dutch Shell Plc. (RDSA)
“An output recovery in Brazil and Russia doesn’t mean we will have enough sugar to surpass global demand by a large margin,” Cosan Chief Financial Officer Marcelo Martins told reporters today in Sao Paulo. “We see a tight scenario and are bullish on sugar prices.”
Brazil’s Center South, the world’s largest producing region, will have a record 34 million tons of sugar output next year, up from 30.8 million tons this year, Copersucar SA said Nov. 23. Output in Russia, the world’s seventh-largest producer of the sweetener, will be a record 5 million tons of sugar this crop year, which runs from October 2011 to September 2012, German research firm F.O. Licht said Dec. 5.
Cosan cut next year’s hedging strategy based on its sugar- price forecast, Martins said. The company, based in Sao Paulo, is hedging about 25 percent of next year’s sugar exports against a price fluctuation, less than the average of at least 30 percent in previous years, he said.
Raw sugar for March delivery fell 4.8 percent to 23.01 cents a pound at 12:18 p.m. on ICE Futures U.S. in New York, heading for the biggest drop since Sept. 16.
To contact the reporter on this story: Lucia Kassai in Sao Paulo at firstname.lastname@example.org
To contact the editor responsible for this story: Dale Crofts at email@example.com