(Adds comments from CEO, context on market situation)
By Marcelo Teixeira
NEW YORK, April 23 (Reuters) - Sugar and ethanol company
Cosan SA expects increased financial difficulties for
some Brazilian companies in the sector as demand for the biofuel
falls and prices for the sweetener hover around a 12-year low
.
Cosan Chief Executive Officer Luis Henrique Guimaraes said
during a call with analysts and investors on Thursday that
opportunities for acquisitions will probably arise as a result
of low prices and falling demand, but added the company is not
looking at consolidation right now.
Cosan partners Royal Dutch Shell Plc in the 50-50
venture Raizen, the world's largest sugar maker and a leading
ethanol producer. Raizen is also one of the largest fuel
distributors in Brazil, managing Shell service stations.
"Opportunities will come, as stronger companies will be the
ones that survive this situation. We don’t know which ones will
not make it; it is early to take positions," Guimaraes said.
The CEO said the company is concentrating in its business
rather than looking at M&A possibilities, adding that fuel sales
have picked up in Brazil in recent days after a demand fall of
around 35% in the first weeks of the coronavirus lockdown.
Guimaraes said Raizen had already hedged over 80% of its
sugar sales and 50% of its ethanol sales for the season that
started this month in Brazil's center-south.
"It is a tough environment specially for companies that
don’t have the discipline to hedge risks."
He said their port terminals in the country are working
normally despite the measures taken by governments to prevent
the spread of the virus.
(Reporting by Marcelo Teixeira
Editing by Chizu Nomiyama and Jonathan Oatis)