Biosev, the Brazilian sugar and ethanol group controlled by France’s Louis Dreyfus, had locked in the price of 86 percent of its expected 2013/14 sugar output before prices reached three-year lows, a local newspaper said on Monday.
In an interview with Brazil’s Valor Economico financial daily, Biosev Chief Executive Malik Akli said, “I don’t know if the market completely understands that the current drop in sugar prices has little impact on our results at this moment.”
Shares of Biosev, which successfully held an initial public offering on the local BM&FBovespa exchange in April, were trading at 13.55 reais, down more than 2 percent from Friday’s close and down 10 percent from the IPO price of 15 reais.
“We’ve already priced the bulk of our production for 2013/14,” Akli said, adding that only 14 percent of this season’s crop remains to be priced.
By December 2012, the company had set the price for 1.4 million tonnes of sugar to be produced by Biosev this year at an average price of 45 centavos/lb, or nearly 22 cents/lb, he said.
New York ICE sugar futures prices ended Friday quoted at $16.86/lb, the lowest in three years.
Biosev is due to crush 33 million tonnes of cane from its group of mills in Brazil’s center-south growing region, an increase of 20 percent over last season.
Brazil’s 2013/14 center-south cane harvest is expected to grow by 10 percent from a year ago to 590 million tonnes this season.
Biosev representatives did not immediately respond to Reuters’ request on Monday for comment on the Akli interview.