UPDATE 2-Copersucar says sugar trading losses erased profit at JV Alvean
(Adds comment from consultant)
By Marcelo Teixeira
SAO PAULO, June 21 (Reuters) - Trading losses in the second part of the 2015-16 crop year, when sugar prices steadily rose, hurt the financial performance of the world's top sugar merchant Alvean, wiping out an early profit in the start of the year.
Alvean, a sugar trading joint venture between U.S. company Cargill and Brazil's Copersucar, performed well on origination of sugar, logistics and physical market operations, Copersucar Chief Executive Paulo Roberto de Souza said.
"But in the trading side, in the bets, it was not a good year for Alvean," Souza said in a conference call with reporters.
Copersucar, the world's largest sugar cooperative that units the output in sugar and ethanol of 20 Brazilian companies, exceeded management's expectations in securing physical sugar for Alvean to trade, surpassing 9 million tonnes last season, Luís Roberto Pogetti, the coop's chairman, said.
Copersucar's ability to tap such a large volume of physical product in Brazil, the world's largest producer of sugar, highlights the logic behind Cargill's decision to form Alvean.
But the trading losses illustrate the difficulty of dealing in a market that turned from a six-year oversupply to expectations of large deficits in a short time.
"They bet on a position and it didn't work out, although it's hard to know exactly what it was," said Alexandre Figliolino, a sugar industry expert at MB Agro Associados. Continuación...