Last update: 23.12.2008
Sugar resists oil price slide and biofuel delay
Source : guardian.co.uk
Weaker oil and the credit crisis have delayed some ethanol projects, dampening demand for sugar cane, but tight global sugar supplies and strong Brazilian use of biofuels will support the sweetener's price.<br />
Brazil, the world's top sugar producer, is a major supplier of cane-based ethanol. Analysts, who see a possible correlation between oil and sugar prices due to the use of cane as a feedstock for ethanol, say sugar prices have so far spurned the drop in oil. Jaspal Phull, research analyst at London's Stenham Asset Management, said the economic crisis had delayed new Brazilian ethanol mill projects. "But fundamentals remain strong, and that's why wealthier groups are still investing in new plants", Phull said. "The main positive fundamentals are the global sugar deficit and booming ethanol demand in Brazil". Last month the International Sugar Organization forecast a global sugar deficit of 3.6 million tonnes in 2008/09 (Oct/Sept), rising to around 4.5-5.0 million tonnes the following season.
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17 December 2008 |
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Articles from December 2008 (107 articles)
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