Macquarie says Brazilian crop will weigh heavily on prices
Published: 03/08/2010, 8:56:22 AM
Macquarie says sugar prices are expected to fall further in the lead up to Brazilian sugar supplies reaching the market in May, according to Dow Jones.
Brazil is expected to harvest a large crop, with Macquarie estimating 2010/11 sugar output at 37.87 million metric tonnes, up 12% on the year.
"It is the anticipation of this onslaught of new sugar supply that is causing the market to sell off earlier than expected," said the bank.
In addition, producer hedging is also likely to put further downward pressure on prices.
"Sugar producers will want to take advantage of the higher levels by implementing long-dated hedge programs," said the bank.