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Mumbai, 22 Sep (Commoditiescontrol): A worldwide sugar shortage, which led to an 11-year peak in prices, is set to reduce, largely due to Brazil's booming corn production. This surge in corn has shifted focus towards ethanol production, a primary fuel in Brazil. As a result, many mills are now prioritizing sugar over biofuel.
Eder Vieito from Green Pool Commodity Specialists highlighted the investment trend in corn ethanol and sugar expansion. This potential drop in sugar prices arrives as a relief amidst rising food inflation and challenges like adverse weather affecting sugarcane in India.
Corn-derived ethanol in Brazil is growing rapidly and is projected to constitute up to a third of total ethanol output by 2033, as per Datagro. However, with ethanol demand waning due to cheaper gasoline, biofuel prices might decline.
Cane mills are gearing up to boost their sugar production capacity in the coming seasons. Meanwhile, the Brazilian sugar industry, with its political ties, may benefit from proposals to increase ethanol in gasoline. But, corn-based ethanol faces challenges, primarily due to a tightening wood chip supply, used as its primary energy source. Nonetheless, many see a promising future for corn ethanol, as indicated by recent expansion plans and abundant corn supplies, especially in the major growing state of Mato Grosso.
(By Commoditiescontrol Bureau; +91-9820130172)
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