Brazil sugar sector gears up for record season, at last

jueves 25 de febrero de 2016 17:48 GYT

* Brazil's main cane belt posed for record cane crop in 2016/17

* Expected end of El Nino should boost cane's sugar content

* Ethanol and sugar prices in Brazil hovering around record levels

* Battered sugar mills to use near perfect season to cut debt

By Marcelo Teixeira

SAO PAULO, Feb 25 (Reuters) - Heavily indebted sugar and ethanol companies in Brazil are gearing up for possibly one of the best seasons ever in 2016/17 as weather conditions point to excellent cane volumes, while prices in local currency hover near record highs.

Brazilian mills appear likely to benefit the most from the first global sugar deficit in six years, which is widening as El Nino hits rivals such as India, Thailand and the European Union. Raw sugar's May futures jumped 8.9 percent on Tuesday on supply worries, the contract's biggest one-day gain.

Sugar and ethanol companies in Brazil have had six lean years as a combination of low sugar prices and a squeeze on ethanol margins sank several mills and led many more to bankruptcy protection.

"As the projections for the global deficit increase, the cycle of low prices seems to be a thing of the past," said Rui Chammas, chief executive at Biosev SA, the world's second-largest cane processor, controlled by French commodities trader Louis Dreyfus.   Continuación...