November 12, 2014

News of a sharp decline in Brazilian sugar production in the second half of October has driven up prices by 3.6% – its biggest percentage gain in over six weeks. Dozens of Brazilian sugar mills have closed for the year after the country’s main sugar cane growing region has suffered its worst drought in decades leaving the industry with low prices and in poor weather. Processors in Brazil’s center-south region produced 2.05 million tons of sugar in the second half of October – 17% less than the same period a year earlier, according to the Brazilian Sugarcane Industry Association.  The news from the country that produces one fifth of the world’s sugar surprised investors who have made large investments based on the belief that sugar prices will continue to decline on the prospects of a global sugar glut. However, despite this recent drop in production, mills in Brazil’s center-south region have produced 29.5 million tons of sugar between April and October of this year – only 0.7% off from last year’s production for the same time period.  To read about additional developments within the Brazilian sugar industry that could affect global markets:

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