Brazil ethanol, sugar sector sees hard times ahead

SAO PAULO, Oct 28 (Reuters) – The global credit crunch delivered the latest punch to the gut of Brazil’s ethanol and sugar industry, which has been struggling with low margins over the past couple of years.

The bright prospects of some years ago seem to have folded according to producers and analysts participating in the annual Datagro Sugar and Ethanol Conference in Sao Paulo this week.

They still believe in the sector’s potential in the long term but also expect pain to deepen in the short term.

“The sector was already in its own crisis before the credit turmoil, due to oversupply (of sugar), falling prices and rising input costs,” said Jose Pessoa de Queiroz Bisneto, president of the family-origin Pessoa group of mills.

Guardian