Brief bit on sugar in today’s Daily Reckoning, a free financial newsletter that I read regularly. The authors are basically angry old men who think America is going down the tubes. They do have very good insights though and I read it for their contrarian views and sense of humor. You can check it out at www.dailyreckoning.com.
*** Sugar is getting a big boost from new reports out of South America.
Our commodities expert, Kevin Kerr, explains why that is...
"Sugar cane is an integral part of the Brazilian people's kitchen. It
is
the source of many useful products. In industry, it is a big
preservative
for warmer climates. And as my Resource Trader Alert readers know, it
is
also a source of electric energy fuel. It can also be a raw material
for
paper, plastics and chemicals.
"Sugar cane is versatile, to say the least...and enormously efficient.
Every ton of sugar has an energy potential equivalent to 1.2 barrels of
petroleum. Brazil is the largest world producer, followed by India and
Australia. On average, 55% of Brazilian sugar cane is turned into
alcohol
and 45% into sugar. Sugar cane is grown in Brazil's central-south and
north-northeast regions, in two harvest periods. When planted for the
first time, sugar cane takes between one and 11/2 years to be ready to
harvest and process. The same plantation can be harvested up to five
times, although significant investments must be made in each cycle to
maintain productivity.
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