Brazilian sugar cane mills are cancelling some sugar export contracts and diverting production to ethanol to cash in on high energy prices, according to people with direct knowledge of the deals, raising concerns of a sugar shortage. Nearly every company involved in sugar trading in Brazil has seen cancellations, a trader at a large international commodities merchant told Reuters on the sidelines of Sugar Week in New York last week. A large fall in sugar output could lead to a global sugar shortage, some traders say.
NEW YORK (Reuters) -Global commodities trader Louis Dreyfus projected on Wednesday that Brazilian mills will divert a larger-than-expected amount of sugarcane to ethanol production due to high energy prices, causing a reduction in global sugar supplies. Dreyfus sugar director Enrico Biancheri said during the Citi ISO Datagro sugar conference in New York that Brazil's center-south (CS) mills would produce only 29 million tonnes of sugar in the new season that started in April, a view that would be in the low end of analysts' estimates so far. "At current prices the world is heading to a shortage of sugar, due to a ethanol-oriented crop in Brazil," Biancheri said, adding that sugar prices will need to rise to a premium over ethanol prices to cause an increase in sugar production.
Ukraine's leading agricultural group, Ukrlandfarming, said on Tuesday Russia's invasion had caused it losses totalling hundreds of millions of dollars, mainly because of the loss of access to land and the destruction of farms. Ukrlandfarming, which produces grain, meat, eggs and sugar, said in a statement that it had lost control of 40% of its land portfolio. It underlined the loss of access to over 100,000 hectares in the Kherson region of southern Ukraine and to 6,500 hectares in the eastern region of Luhansk, territory that is part of its total land bank of 500,000 hectares.