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Consultancy says Brazil will cut sugar exports to Brazil by 14% due to mills switching to ethanol
Brazil's biggest sugar exporter and producer is expected to reduce shipments by 14.2% in the upcoming 2026/27 - season that begins in April - as mills reroute sugarcane for ethanol production due to high energy prices. Safras estimates total Brazilian sugar exports for the new season including the Center-South, North/Northeast and North/Southeast regions at 29 million metric tonnes, compared with 33.8 million in 2025/26. In a report, the consultancy stated that Brazil's sugar production will fall to 40.33 million tons by 2026/27 from 43.5 million tons during the previous crop. The total ethanol production would rise 10.7%, to 42.58 billions liters, if fuel made from?corn is included. Analyst Mauricio Mauruci of Safras Sugar and Ethanol expects that the Brazilian government will increase the amount of ethanol blended in gasoline in the second half of the year from 30% to 35%. This could lead to a rise in demand for anhydrous alcohol. According to him, every additional percentage point in the blend rate will add 920 millions liters to the fuel mix of Brazil. Brazilian mills are able to adapt their plants based on the market price to produce more sugar, or ethanol. At the moment, ethanol is a more profitable option. ethanol will become even more rewarding if gasoline prices increase. Petrobras, the state-controlled Brazilian oil company, has not yet raised gasoline prices since the beginning of the Iran war. Local gasoline prices are around 40% below import parity. Brazilian President Luiz inacio Lula da So is running for reelection. Safras & Mercado projects that mills will reduce their sugarcane consumption to 47% in the next season, down from 49%. The remainder will be used to produce ethanol.
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Brazil's central bank expects inflation to remain above target for several years, as rising oil prices boost outlook
Brazil's central bank expects inflation will pick up in the second half of this year, driven largely by higher oil costs due to U.S. and Israeli war against Iran. It also expects it to stay above its 3% goal throughout its forecast period. In its quarterly report on monetary policy, released Thursday, the monetary authorities estimated that 12-month inflation would be 3.1% by the third quarter 2028. This was the farthest projection of theirs. The bank cut interest rates last week, but it was less than expected due to a rise in oil prices caused by the Middle East war. Paulo Picchetti said at a press conference that there is a great deal of uncertainty about the intensity, duration and unfolding of the conflict. The Governor of the Central Bank, Gabriel Galipolo, said that the bank would need time to fully understand the impact of the conflict. He added: "We'll learn more at the next policy meeting." PROJECTS EXCEED THE CENTRAL BBANK GOAL The policymakers believe that the annual inflation rate, which was 4.26% in 2018, will decelerate and fall to 3.6% by the first quarter 2026. However, it is expected to trend higher until the end of the year. Later, it should resume a downward trend "while still remaining above the target". The central bank revealed a 3.3% inflation projection for 2027 in its?report, after announcing last week that it had forecast 3.9% for this year. Last week, the bank began its long-anticipated cycle of easing by reducing rates to 14.75 percent. However, it did not provide any forward guidance. The central bank's monetary policy horizon for the third quarter 2027 was revised upwards by 0.1 percentage point. The report said that the higher oil prices, as well as a revised output gap, were among the factors responsible for the rise. Itau economists stated that oil price forecasts in the report could be "more benign" than other more realistic estimates. They added that the bank may have underestimated upcoming short-term inflation rates. In a client note, they said that "this set of information (which is still subject to change depending upon the 'geopolitical background') limits the scope for an accelerated monetary-easing rate at the April meeting." The central bank has also confirmed its forecast of 1.6% growth in the gross domestic product for this year. (Reporting and editing by Marcela Ayres, Gabriel Araujo; Editing by Andrei Khalip).
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As Iran crisis drives oil prices above $105
The major stock indexes dipped on Thursday as Brent oil futures rose over $105 per barrel. Iran's denial that it has ever held any kind of talks with the U.S. dimmed hopes for a rapid resolution of the Middle East conflict, which has lasted nearly a month. The U.S. Dollar was also boosted by safe-haven purchases, which pushed yields up. The prospect of a long-term war in the Middle East has sparked concerns about disruptions to energy supplies. Brent futures rose $4.77 to $106.99 per barrel, while U.S. crude oil futures increased $93.64. Donald Trump, the U.S. president, warned Iran to "get serious", about a deal that would end almost four weeks of fighting. Abbas Araqchi, Iran's foreign minister, had said earlier that Tehran was reviewing?U.S. There were no discussions about ending the war, but Iran's Foreign Minister Abbas Araqchi said that Tehran was reviewing the?U.S. Iran launched multiple missiles against Israel on Thursday. The U.S. and Israeli strikes on Iran, which began in late February rattled the global markets, and shut down the Strait of Hormuz - a vital conduit for oil and LNG flows. Peter Cardillo is the chief market economist of Spartan Capital Securities, New York. He said that stocks fell as oil prices began to rise again. "Unfortunately, the oil price is driving our market. He said that the rhetoric is still going on and until there is a breakthrough in the talks, the oil price will continue to affect the market. The Dow Jones Industrial Average dropped 75.50 points or 0.19% to 46,342.69; the S&P 500 declined 43.59 points or 0.68% to 6,547.14; and the Nasdaq Composite was down 216.95 or 1.02% to 21,705.16. The MSCI index of global stocks fell 6.75 points or 0.68% to 988.71. The pan-European STOXX 600 fell by 0.64%. South Korea's KOSPI fell 3.2% due to concerns about rising energy prices. Hong Kong's Hang Seng dropped by 1.9%, and China's blue-chip index fell by 1.3%. Due to the unrest, the Philippines held an unexpected central bank meeting. The head of Germany's central banks said that an ECB interest rate increase next month is "an option". Fears of an inflation shock similar to that in 2022 have caused traders to fully price out the possibility?of a Federal Reserve interest rate cut this coming year, which has further supported the dollar. The yield on Germany's 2-year bonds, which is sensitive to the?rate expectation of the European Central Bank, has risen after falling on Wednesday. Bond yields are inversely related to price. The U.S. Treasury yields also rose due to concerns about inflation. The benchmark 10-year Treasury yield in the United States was up 4.2 basis point at?4.37%. The yield on the two-year bond was up 5.4 basis points at 3.934%. The yield on Japan's 2-year government bond reached its highest level for 30 years earlier, at 1.33%. Traders bet on a Bank of Japan rate increase as soon as next month. The U.S. Dollar?rose? against most major currencies and re-established its?safe-haven appeal. The dollar index (which measures the greenback versus a basket of currencies, including the yen, the euro and others) rose by 0.1% to $99.75. Meanwhile, the euro fell 0.13% to $1.1544. The dollar gained 0.04% against the Japanese yen to reach 159.53. The dollar has risen, and gold has fallen. Spot gold fell 0.89% to $4,465.06 per ounce.
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Petrobras will boost fuel supply in April via contracts and avoid auctions
Petrobras, Brazil's state-owned oil company, announced on Thursday that it has changed its fuel supply strategy. It will now?offer more fuel to distributors for April deliveries. Petrobras announced that it would supply 70 million liters more of S10 diesel next month and 95 million liters more of gasoline. The extra volumes will be delivered via existing contracts, rather than through diesel and gasoline auctions. Sources said that the change will result in fuel being sold at a lower price than if it was auctioned, and this is helping to keep domestic prices under control despite a recent spike triggered by a U.S./Israeli 'war on Iran. Petrobras had been negotiating additional fuel volume via auctions but abruptly cancelled them when premiums of up to 2.00 Reis ($0.3445-0.3828 per liter) over refinery prices were discovered, according to sources familiar with this matter. The sudden halt of the auctions early last week, without any explanation, heightened supply concerns for the month of April. Oil regulator ANP ordered the oil company to release the volumes. Brazil's government also abolished federal taxes on diesel fuel in an effort to reduce the impact of rising global oil prices. ANP has been fighting price gouging by gas stations. As he runs for re-election in this year, President Luiz Inacio Lula Da Silva is concerned about the rising fuel prices.
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Trump warns Iran that the US will keep blowing them off if they don't make a deal
On Thursday, President Donald Trump urged Iran to?make a deal that would end the?U.S. Israeli bombing or face a retaliatory?strike on their country. "They have the opportunity, Iran, to abandon permanently their nuclear ambitions, and to join a different path forward," Trump stated?during an Cabinet meeting at White House. "We'll?see if they want to. If they don’t, we're their worst nightmare. We'll keep blowing them away in the meantime. Trump's remarks came after a senior Iranian official told reporters on Thursday that Washington’s proposal to end nearly four weeks worth of fighting was "unfair and one-sided" but diplomacy continued. Trump claimed that Iranians were in talks with the U.S., and characterized them as 'desperate? to make a deal. Tehran denies these characterizations. He called Iranian officials "great negotiators", and said that he wanted to reach an agreement which would open the Strait of Hormuz, and end Tehran's military ambitions. Trump said that a deal may not come together. He said, "I don’t know if I'll be able do that," about the prospects of a deal. I don't think we would be willing to do it. (Reporting and writing by Steve Holland, Trevor Hunnicutt, editing by Scott Malone).
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Sources say that Guinea and Emirates Global Aluminium are close to a deal to resolve an asset dispute.
Three people familiar with the matter said that Guinea and Emirates Global Aluminium (EGA), have reached an agreement which 'will prevent a looming arbitral hearing' over last year's seizure by 'the miner's' local unit. According to traders and government officials, as part of a broader resolution, traders have explored bauxite deals that are linked to the assets seized, including structures whereby upfront prepayments for future shipments would help settle EGA claims. The deal is still being finalised. It follows the government taking over Guinea Alumina Corporation,?EGA's subsidiary for bauxite, in October, following a dispute about alumina refineries. The company then transferred GAC's asset to the state-owned Nimba Mining, and discussed potential bauxite supply to EGA. TECHNICAL DETAILS REMAIN AFTER DEAL CLOSE An official from the government confirmed that a deal was near but said several technical details were still unresolved. An expert in mining said that the deal could still be changed, because EGA's priorities might change due to the Middle East war. EGA, Nimba, and Guinea's Mines Ministry did not respond immediately to requests for comments. Two traders reported that the offtake discussions were complex. They said traders were cautious to commit capital without complete visibility of supply chains and compliance standards. Sources requested anonymity because of the sensitive nature of the discussions. GUINEA WANTS UPFRONT PAID The takeover of Guinea by the African governments, as part of their broader effort to earn more money from their mineral resources has disrupted bauxite supplies. A trading source stated that 'interest was focused on spot cargoes between 400,000 and 500,000 metric tonnes, with bids up to 600,000 tons. The source stated that larger volumes up to 1.6 millions tons were discussed, but not secured. The source stated that "we need to see the assets and ensure that the material is traceable as well as assurances about?labor standards". A trading source said that the government’s attempts to secure upfront payments to compensate EGA have complicated negotiations for a long term offtake contract. The arrangement would require that a new buyer make a bulk payment, which would then be amortized over the future deliveries of bauxite. The two traders claimed that Nimba Mining had held discussions with several major trading companies. Maxwell Akalaare Adombila, Bernadette B. Baum and Maxwell Akalaare Adombila (Reporting)
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Constellation's executive claims that grid operator told the company Three Mile Island cannot be connected until 2031
The U.S. grid operators PJM and Constellation Energy have told Constellation Energy the 'former Three -Mile Island nuclear /power?plant' in Pennsylvania will likely not be able connect to the grid before 2031. This is four years later than originally planned. Constellation is working to restart operations at its nuclear power plant, which will be renamed Crane Clean Energy Center to "feed Microsoft data centres". Constellation's chief?external and growth officer, David Dardis said that the company will be ready to produce electricity at the plant before its goal of 2027. It is also in talks with the grid operator PJM interconnection about reducing the timeline. Constellation, America's largest independent?power company, announced that in 2024 it had?contracted Microsoft to reopen a nuclear power plant. Three U.S. nuclear plants are in the process of restarting their reactors, as a result of a growing demand from Big Tech data centers,?electrification and transportation?, and other?data center-related projects. Reporting by Laila KEARNEY in Houston, editing by Lisa Shumaker
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Oil price spikes as Iran crisis causes a drop in stocks and bonds
Oil surged over 5% on Thursday, and Iran's denial that it had held any talks with the U.S. heightened doubts about the prospects of a rapid ceasefire for the Middle East conflict which has lasted nearly a month. The conflicting signals about the'scope of contact', as well as reports that thousands of U.S. troops were being sent into the region, halted the three-day recovery in the world?stocks? and reignited the selling on global debt markets. Germany's central banking head stated that an ECB interest rate hike next month is "an option". Norway also said they are likely to raise rates this year. The U.S. president Donald Trump warned Iran to "get seriously" about a cessation of hostilities. Oil and European Natural Gas prices rose more than 5% and 4%, respectively. Brent reached just over $107 per barrel, and gas rose to 54.9 euro per megawatt-hour. Their gains for the month were an eye-watering 45% & 70% respectively. This has fueled policymakers' fears of another inflation spike similar to that seen in 2022. Joachim Nagel, the German central bank's chief, said in an interview that he believes there will be enough data to decide by April whether or not we should take action. He said that it was only one of many options available to the ECB, but added "we shouldn't be afraid just because it is still early." Trump said again on Thursday that Iran is "begging" for a deal in order to end the conflict. Abbas Araqchi had said earlier that Tehran was'reviewing a U.S. offer but did not intend to hold talks. The U.S. and Israeli strikes against Iran in late-February shook global markets, and shut down the Strait of Hormuz – a conduit that carries a fifth of global oil and gas flows. The first economic forecast by the Paris-based OECD after the crisis erupted predicted that it would suppress the global GDP growth and keep it below 3% in this year. After falling by 4 basis points on Wednesday, the yield of Germany's 2-year bonds, which is sensitive to expectations about interest rates from the European Central Bank, increased 8 basis point to 2.68 percent. Bond yields are inversely related to bond prices. As traders bet on a Bank of Japan rate increase as soon as next month, the U.S. 2-year yield reached 4%. Japan's two-year yield hit its highest in 30 years, at 1.33%. Pascal Koeppel is the chief investment officer at Vontobel SFA. He said that a prolonged disruption could cause energy prices to rise and inflation to increase, which would force central banks into tightening. On Thursday, the central bank of Norway said that it expects to increase its rates due to an increase in energy prices and wages this year, after initially indicating it might cut them. Koeppel, Vontobel's Koeppel, added: "I would be more nervous if we saw ground troops (of the U.S.) in action." If this happened, "we'd trim the risk... and invest more in short-term government bond and gold, obviously." STRUCTURAL CHANGES Wall Street's main markets opened about 1% lower and the Asian markets fell overnight. Japan's Nikkei ended down 0.3% while concerns over rising energy prices hammered South Korea KOSPI which fell 3.2%. Hong Kong's Hang Seng dropped by 1.9%, and China's blue-chips fell by 1.3%. This puts MSCI's Asia-Pacific index outside Japan on course for its biggest monthly drop since October 2022, 9.5%. The dollar is gaining 2% this month and has been near its recent highs. This will revive the safe-haven appeal of the currency after last year's over 9% decline. Traders have priced out the possibility of a Federal Reserve interest rate cut in this year due to fears of an inflation shock similar to that of 2022. This has further supported the dollar. Gold, a traditional safe-haven, has fallen more than?16% in the last month, on track for its steepest drop?since Oct 2008. Gold was down 2% on Thursday at $4,421, but still nearly?50% above where it was a year earlier. It will be difficult to reconcile the goals of the U.S., Israel, and Tehran, said Matthias Scheiber. He is the senior portfolio manager at Allspring Global Investments and head of their multi-assets team. "We think that there are still arguments to be made for higher energy prices at the moment."
Sources say that Guinea and Emirates Global Aluminium are close to a deal to resolve an asset dispute.
Three people familiar with the matter said that Guinea and Emirates Global Aluminium (EGA), had reached an agreement which will prevent a looming arbitration over the seizure last year of the miner’s local unit.
According to traders and officials, as part of a broader resolution, traders have explored bauxite deals that are linked to the assets seized, including structures where upfront payments on future shipments would be used to settle?EGA claims.
The deal is still being finalised. It follows the government taking over Guinea Alumina Corporation, EGA's subsidiary for bauxite, in October, following a dispute about alumina refineries.
It then transferred GAC’s assets to state-owned Nimba Mining, and discussed possible bauxite supply to EGA.
DEAL CLOSE, TECHNICAL DEADLINES REMAIN
Officials from the government confirmed that a deal was close, but several technical details were still unresolved.
An expert in mining who is familiar with this?matter has said that the deal may still change, since EGA's priorities could be re-evaluated due to the conflict in the Middle East.
EGA and Nimba declined to comment, while Guinea's Mines Ministry did not respond immediately to requests for comments.
Two traders reported that the offtake discussions were complex. They said traders were cautious to commit capital without complete visibility of supply chains and compliance standards.
Sources requested anonymity due to the sensitive nature of the discussion.
GUINEA WANTS UPFRONT PAID
The takeover of Guinea, as part of the broader African governments' drive to earn more money from their mineral resources has disrupted supply chains for bauxite.
A trading source stated that interest was focused on spot cargoes between 400,000 and 500,000 metric tonnes, with bids up to 600,000. The source stated that larger volumes up to 1.6 millions tons were discussed, but not secured.
The source stated that "we need to see assets and make sure the material is traceable as well as?assurances about labour standards".
The government's attempts to secure "upfront prepayments" to compensate EGA have complicated negotiations for a long term offtake contract. According to a trading source, traders are wary of this structure.
This arrangement would require that a new buyer make a large payment, which would then be amortized over the course of future bauxite delivery.
The two traders claimed that Nimba Mining had held discussions with several major trading companies. Maxwell Akalaare Adombila, Bernadette B. Baum and Maxwell Akalaare Adombila (Reporting)
(source: Reuters)