Alastair Stewart South America Correspondent
Wed May 27, 2015 02:12 PM CDT

Brazil's Continuing Cane Malaise

Signals that the Brazilian government will let fuel prices rise have encouraged cane ethanol producers in recent months.

In February, Brasilia allowed gas prices to rise R$0.22 per liter (2 cents per gallon), breaking with the strict controls of fuel prices to cap inflation. As ethanol is both a 27% gasoline fuel additive and a rival fuel, this has a direct impact on prices for the biofuel.

But the benefits of this will be offset by the continuing pressure on the price of sugar, the other main product derived from cane.

Meanwhile, the continued economic uncertainty, ...

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