January 20, 2014
SugarOnline
Raw sugar prices Tuesday rose to the highest level in more than a month after top producer Brazil unveiled higher taxes on gasoline, a rival fuel to sugar-based ethanol, according to Dow Jones.
Brazil is both the world's largest producer of sugar and cane-derived ethanol, and its mills can often produce both products, changing the emphasis on either the sweetener or biofuel depending on prices and demand.
The taxes, announced Monday, will likely mean higher prices at the pump for Brazilian drivers, who could then opt for ethanol. Higher demand for ethanol could mean processors use more of their cane to make the biofuel, thereby limiting sugar production, said Michael McDougall, senior director at brokerage Newedge.
Brazil will raise a tax on gasoline and diesel on Feb. 1 and increase a different tax on fuels after 90 days. Finance Minister Joaquim Levy said the higher taxes are part of a package intended to generate BRL20.6 billion (US$7.8 billion) in government revenue this year.
The March raw sugar contract on the ICE Futures U.S. exchange hit 15.51 cents a pound, the highest level since Dec. 11. The contract was recently trading up 0.9% at 15.46 cents a pound.
Reference: http://sugaronline.com/news/website_contents/view/1239057#sthash.TQjFS5y...