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23/11/2011 - REUTERS
WRAP-World sugar trade volumes risk falling near term

By David Brough and Inae Riveras

   SAO PAULO, Nov 24 (Reuters) - World sugar trade volumes risk falling in the near term as top producer Brazil´s  competitiveness erodes and traditional importers produce more for themselves, delegates attending Brazil Sugar Week said.

   Brazil´s  costs of sugar production, fed by its booming economy and strong currency, had risen to around 18 to 22 cents a pound, creating an opportunity for other suppliers, such as Thailand, India and Latin American countries, as well as traditional importers like Russia, to increase production.

   Brazil Sugar Week brings hundreds of producers, shippers, food industry executives, traders and analysts to Sao Paulo, culminating in a dinner at sea off Santos port Thursday night.

   A key theme of participants at the week´s events has been fears that Brazil, the world´s leading exporter, was losing competitiveness as its production costs rise.

   Julio Borges, head of the JOB Economia consultants, in an interview with Reuters late on Wednesday, said he agreed with industry analyst Jonathan Kingsman that Brazil´s  rising costs and increased production by other suppliers, including traditional importers, could diminish world sugar trade volumes in the near term.

   "Brazil will be a big umbrella for the world sugar market, and sugar producers around the world will use this umbrella to produce sugar and take profits," Borges said.

   Several origins now produce sugar more cheaply than Brazil, including Thailand, which has posted a record crop, Australia, and some European producers, including France, analysts said.


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