Tag Archives: sugar cane

BNDES provides $593 million in loans to ethanol sector

BNDES of Brazil is to provide 1 billion Reais ($593 million) in credit to the ethanol sector over the next four years to fund development of technology.  The funding is to develop technologies in connection with  ethanol and cellulosic ethanol.  The move is seen as a bid not to lag behind North America in developing second generation ethanol technologies.

Brazil was the world’s largest producer of ethanol before being overtaken by the US.  Brazil primarily uses sugar cane as feedstock for ethanol while the US primarily uses corn.  The US now produces twice the amount of ethanol produced by Brazil.

The loans will be to fund research and are available from BNDES and FINEP, an arm of the Science Ministry.

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Brazil’s cane crop to increase by 20 million tonnes in 2011/12

The International Sugar Organization is forecasting Brazil’s cane crop to increase by 20 million tonnes in 2011/12 to 640 million tonnes.  While sugar output in the Centre South region is expected to rise by 2 million tonnes to 36.5 million tonnes.

 

Brazilian sugar cane to be diverted to ethanol production

Ethanol demand in Brazil may see sugar cane diverted to ethanol production rather than sugar thereby dashing hopes of the possibility of higher sugar production to ease supply.  It is expected that some growers may increase the size of their crops to take advantage of higher sugar prices which in turn may see prices fall later in the year as supply concerns ease.

Despite a larger sugar cane crop expected in 2011/12 sugar production is unlikely to be significantly increased or changed due to the diversion of cane to ethanol production. Rising domestic ethanol demand in Brazil is likely to continue into next year.

Brazil’s sugar production figures, rising domestic Brazilian ethanol demand, India’s OGL sugar exports now looking unlikely, EU out of quota imports and the impacts of cyclone Yasi on Australian production may provide sugar prices with support as concerns grow concerning supply tightness.

Monsanto gets green light on beet sugar

The United States Department of Agriculture (USDA) has permitted Monsanto to proceed with the planting of genetically modified beet.  Monsanto’s GM sugar beets are resistant to herbicides aimed at eliminating unwanted weeds.  The USDA has granted the approval on a temporary basis until an environmental impact assessment is complete.

The aim is to avoid a drop in beet sugar production of up to 20% of US sugar.  This amounts to approximately 1.5 million tonnes.  Beet sugar production accounts for 50% of US sugar.

Concerns over sugar crop in Brazil

Although the market is technically overbought which would normally indicate a possible reversal, at least in the short term sugar looks likely to make further gains due to supply concerns in Brazil and a harvest likely to end sooner.

A weak dollar and a rally in corn prices due to a worse than expected crop in the U.S.  also supported sugar and ethanol prices.  However, as open interest is lower in the midst of such a rally this could be an indication that once the rally has lost its steam there could be a reversal.

The uncertainty continues

Brazilian mills and refineries are buying back sugar contracts from the trade resulting in rising domestic prices in Brazil as well as a likely impact in international markets.

While in India production forecasts have being increased due to a smaller than expected impact following flooding and therefore lower crop loss.   In Russia crop damage due to bad weather resulting in lower local sugar production is expected to lead to increased imports in the first half of 2011. It is expected that Russia will export between 1-2 million tonnes as a consequence.

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