Brazil, the globe's largest producer of the soft commodity, is likely to see intensifying competition for sugar cane raw material in 2013. The sweetener has dropped 15 percent since the beginning of this year. The government of the South American nation next year is poised to increase the required blend of ethanol into gasoline to 25 percent from 20 percent, where it presently stands.
"As a result, approximately 20 million tons of sugar cane would be needed extra for the production of ethanol," analyst Hans van Cleef with ABN Amro Bank NV said in a quarterly report, according to Bloomberg, also noting prices of the sweetener are likely to see their downside minimized by the production of ethanol.
At 1:44 p.m. on Thursday, sugar futures fell 0.66 percent, a 0.0013 cent loss to 0.1955 cents per pound.
Reuters reports sugar dealers in Brazil said large amounts of sugar mills remain open to finalize the end of the season's crop.