Brazil: Sugar company Moreno applies for bankruptcy protection

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With depressed sugar prices worldwide, many sugar mills are finding it difficult to survive. Low sugar prices have affected many mills worldwide and made it difficult for them to survive in the industry.  Due to surplus stocks, low prices and no profit, many sugar mills were forced to shut their operations. This grim situation has also impacted  Brazilian sugar and ethanol maker Grupo Moreno.

According to the reports, the company has filed for bankruptcy protection. It runs three plants in the heart of Brazil’s sugarcane belt. This move by the company comes after depressed sugar prices in the recent years and the poor margins in the domestic ethanol market between 2011 and 2015 when the Brazilian government’s kept gasoline prices low to fight inflation, which led weak profit in Ethanol production.

Moreno’s debt is estimated at around 2 billion reais ($453.44 million). The company is consulting banks and investors for debt restructuring, and it owns assets, including agricultural land and power generation installations using biomass.

Last month, French sugar company Tereos Commodities had also announced plans to shut down operations and stop sugar trading in Kenya and South Africa by 2020.

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