REPORTS

• Sugar's surge to two-year high has Brazilian mills considering output change - Reuters - Brazilian sugar mills are considering increasing their raw sweetener output at the expense of ethanol for automobile fuels after sugar futures surged to a two-year high this week, analysts said this week. Raw sugar futures have climbed 9.1% since Jan. 2 after news of output declines in producers such as Thailand raised supply concerns amid an expected global deficit for the 2019/20 crop year that started in October. Brazilian mills will post an all-time low production mix for sugar this season with only 34% of the cane used to produce the sweetener with the rest going to ethanol as demand and prices for the biofuel have increased. The current raw sugar price at 14.32 cents per pound is not quite enough for mills to start switching. However, higher prices could incentivize mills to sell futures to lock in the gains and shift their production mix. Another said that the recent gains may lead some mills to make and sell more sugar, but only "the ones that are closer to the ports, served by good roads and the rail line in Sao Paulo state". Other analysts believe that prices will need to be much higher than 15 cents per pound to compel mills to reduce their ethanol output in favor of raw sugar.