According to reports from Bloomberg.com sugar output from Brazil will fall this years as more sugar is diverted into ethanol, with higher returns being yielded from this sector as a result of lower world-market prices for sugar. This news caused a 1% rise in the world sugar price on the New York futures market. However ED&F Man have warned of an oversupply of ethanol in Brazil, but they nevertheless expect world sugar prices to remain within the 9 to 12 cents/lb range. Meanwhile white sugar prices have fallen to a two-year low, as low-quality Indian white sugar comes onto the world market.
World-market prices of between 9 cents/lb and 12 cents/lb, coupled with the recent depreciation of the US dollar against the euro, would be likely to require a further round of EU sugar-price reductions in 2013, so as to narrow the gap between EU and world-market sugar prices, in a context of the EU’s commitment to phase out export refunds by 2013.