Brazil mills cut debt as domestic sugar prices jump

lunes 14 de diciembre de 2015 14:32 GYT
 

* Last week Tonon Bioenergia sought court protection

* Domestic prices of low quality whites highest since 2012

By Marcelo Teixeira and David Brough

SAO PAULO/LONDON, Dec 14 (Reuters) - Cash-strapped Brazilian mills, which struggled for years with weak sugar prices due to a global glut, say they are now locking into a surge in domestic prices to cut debt.

The domestic sugar market is tightening in Brazil after heavy rains cut sugar content in cane, while the global market is shifting into deficit after years of surpluses, driving up world raw sugar futures prices to near 10-month highs.

Many mills in Brazil, the world's top sugar producer and exporter, have closed after years of low sugar prices as a result of over-supply of the sweetener.

Last week, Brazilian sugar and ethanol producer Tonon Bioenergia SA, which operates three mills, sought court protection against creditors.

Low-quality white, so-called crystal sugar traded in Brazil's domestic market at 80.19 reais per bag (50 kg) on Friday, the highest price since January 2012, according to a market report released by think-tank Cepea/Esalq on Monday.

"We have no investments in expansion. All the available resources are being earmarked for crop care and maintenance," said Paulo Prignolato, chief financial officer of Biosev SA , the world's second largest cane processor.   Continuación...