Sugar turns bitter in Brazil as prices drop

Sugar prices dropped to 6.5 year low yesterday, when prices tumbled by 4.5%. In 2011, price reached $35 per pound. Since then prices have kept tumbling to reach $11.5/pound. Yesterday, price dropped $11.35/ pound. Such level is was last seen during first quarter of 2009.

Further decline seems likely towards $10/pound, lowest price in eight years.

Brazil is world's largest producer and exporter of Sugar. About 26% of world's sugar is exported by Brazil.

With sugar prices down, Brazil's pain is unlikely to subside any time soon.

This year amid commodity rout, Brazilian economy is suffering with slowdown, high inflation and currency depreciation.

Brazilian Real, which is trading at 3.185 against dollar, is likely to depreciate further. However, dollar bulls might reconsider immediate jump as bearish doji is at play in daily chart.

Brazilian Real has fallen more than 40% in last 12 months, while it dropped almost 24% this year alone so far.