Brazilian President Jair Bolsonaro's move to sharply cut taxes on fuels, particularly gasoline, to boost his reelection chances has squeezed ethanol's profit margins and is expected to lead mills to shun the biofuel and focus strongly on sugar.
Sugar and ethanol experts said that profits on sugarcane-based ethanol sales have fallen so low compared to those of sugar that Brazil mills, which have flexibility to make more of one or another, will shift as much as possible to sugar production as the harvest enters the second half.
