Brazil sugar, coffee producers lock in profits on currency drop

From www.reuters.com

SAO PAULO (Reuters) – 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.

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