Fitch says outlook on Brazil sugar, ethanol sector "stable" in 2013

Jan 8, 2013 - Fitch yesterday assigned a "stable" outlook for Brazilian sugar and ethanol sector players in 2013.
The agency attributed the projected stability mainly to the improved capital structures of sector companies and the expected recovery of Brazilian sugar cane output in the current 2012/13 crop year.
Producers' flexibility to adjust production between sugar and ethanol coupled with proper inventory management are also seen to contribute to the stable operating results this year, according to Fitch.
Sugar prices will support the sector's continued profitability and boosted domestic demand for ethanol will also have a positive effect on pricing fundamentals, the agency also outlined. Ethanol prices, however, are expected to remain stable in 2013 irrespective of potential petrol (gasoline) price increases, considering anhydrous ethanol blend into petrol continues at the up-to-date mandatory 20%.
Rating agency website: www.fitchratings.com

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