Revisiting the Brazilian sugar market

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09 September 2009

One year on from what he termed the Brazilian sub-prime, Eduardo de Paula Ribeiro Filho explains the latest developments in Brazil’s sugar market.

This article appears in the September print edition of Trade Finance under the headline Re-counting the cost.

Eduardo de Paula Ribeiro Filho* comments on the state of the Brazilian commodity finance market almost a year on from his original article on what he termed the Brazilian sub-prime. Here, he provides an update on the impact of the latest developments of the sugar markets on Brazilian mills and the importance of looking at this activity as a food industry. As much as ethanol may become the most important product, the sugar cane industry is much more than just the energy business so much in vogue in the last few years.

In October 2008, the excess liquidity available to Brazilian sugar exporters for trade finance and other long- and short-term debts, in particular the infamous derivative enhanced loans, had already given place to a lack of external facilities and a halt in...

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