Falling sugar prices approaching “ethanol parity” - Marex

Published: 05/08/2017, 2:38:36 PM

Raw sugar futures have continued to ease, dipping to 15.24 cents a pound on Friday for July delivery, the contract's lowest level in more than a year, reports Agrimoney.

The extent of the price falls has in fact raised ideas that selling may ease, with prices approaching the "ethanol parity" level, below which it pays Brazilian mills to process cane into ethanol rather than sweetener.

"We would say that from a fundamental point of view it must be very close" to ethanol parity, broker Marex Spectron said.

"From here on down we could lose up to 6 million tons of supply if sugar continues to go down, providing of course that ethanol stays still."