SUGAR Analysis: Cheap oil can reduce bio-ethanol production in Brazil

February 27, 2020

By IFCMarkets

Cheap oil can reduce bio-ethanol production in Brazil

In Brazil biofuels and sugar are produced from sugarcane. Therefore, in a period of low world oil prices, Brazilian farmers are reducing the production of bioethanol and increasing sugar production. In addition, the weakening of the Brazilian real is also a bearish signal for sugar, which is being traded now near a 2-year high. Brazil is the world leader in sugar production with a share of about 20%. India is the 2nd largest sugar producer in the world and the largest consumer at the same time. The Indian Sugar Mills Association (ISMA) raised its forecast for sugar production in India in the 2019/20 season from 26 million tons to 26.5 million tons. At the same time, the surplus of sugar in 2020-2021 may amount to 6 million tons. The Indian government can encash this volume in the global market.

Indicator VALUE Signal
RSI Sell
MACD Sell
MA(200) Neutral
Fractals Sell
Parabolic SAR Sell
Bollinger Bands Sell

 

Summary of technical analysis

Order Sell
Buy stop Below 14,4
Stop loss Above 15,4

Market Analysis provided by IFCMarkets


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