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News from Global AgInvesting 2011: Sugar Prices May Rebound on Ethanol Demand in Brazil, Amerra Says (5.4.2011)
by Debarati Roy

May 4 (Bloomberg) -- Sugar prices that have plunged from a 30-year high in February will rebound as demand increases for ethanol in Brazil, the biggest producer, according to Craig A. Tashjian, the co-founder of Amerra Capital Management. 

“We will see a correction on the higher side as Brazil is facing an ethanol shortage,” said Tashjian, who runs a credit fund covering the agricultural business in North America and South America. “The demand for sugar cane to make ethanol will rise” in Brazil, he said in an interview at an agricultural conference in New York.

Prices have slumped 34 percent this year as concern eased that global supply will fail to keep pace with demand. The decline is the biggest among 19 raw materials tracked by the Thomson Reuters/Jefferies CRB Index.

Raw sugar for July delivery slipped 3.2 percent to 21.35 cents a pound today on ICE Futures U.S. in New York. On Feb. 2, the price reached 36.08 cents, the highest since 1980.

The sweetener may bounce back to the 30-cent level, if there are any weather disruptions in Brazil and India, the
second-biggest producer, Tashjian said. “The room for error has been vastly reduced,” he said.

Amerra was formed in partnership with Macquarie Group Ltd. and M.D. Sass Investor Services Inc. in February 2009.

--Editors: Steve Stroth, Daniel Enoch

For Related News and Information:
Top commodity reports: CTOP <GO>
Top agricultural stories: TOP AGR <GO>

To contact the reporters on this story
Debarati Roy in New York at +1-212-617-5307 or
droy5@bloomberg.net;

To contact the editor responsible for this story:
Steve Stroth at +1-312-443-5931 or
sstroth@bloomberg.net.

 

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