Published:  12:45 AM, 13 June 2018

Brazil sugar, coffee producers lock in profits on currency drop

Brazil sugar, coffee producers lock in profits on currency drop

Many Brazilian coffee and sugar producers saw a rare opportunity last week to fix prices with solid profit margins at a moment of global oversupply for both products, moving quickly to cash in when the local currency hit its cheapest levels in two years.

Grain farmers also locked in some sales, mainly for the next soy crop, but dealmaking was slower due to a policy debate over freight costs, analysts and market players told Reuters.

The Brazilian real plummeted around 5 percent on June 7 to nearly 4 reais per U.S. dollar - its weakest level since March 2016 amid concerns about erratic economic policy and a wide-open presidential race. For producers selling commodities in dollar terms, that meant more reais per ton of coffee, sugar or corn.

Funds investing in commodities and food processors track information on sales volumes from origins that are large producers, like Brazil, to better adjust their positions in the market. "There was a large volume of sugar sales when the real reached 3.90 per dollar," said Douglas Oliveira.

---Reuters, Sao Paulo

Leave Your Comments



Latest News


More From Global Business

Go to Home Page »

Site Index The Asian Age