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-   -   I Love Brazil (http://www.elitetrader.com/vb/showthread.php?t=63234)

Martin Gale Jan 31st, 2006 04:03 PM

I Love Brazil
Brazil's economy is on steroids right now thanks to abundant natural resources and high commodity prices. EWZ has been very good to me.

How do you play this?:

January 23 - Bloomberg (Carlos Caminada): "Brazil's Agriculture Minister Roberto Rodrigues said the country must invest $10 billion over the next six years to boost ethanol output in order to meet rising foreign demand for the fuel."

futures_shark Feb 1st, 2006 08:17 AM

I read somewhere that 90% of Brazilian vehicles operate on ethanol. With the current high oil prices ethanol probably is more competitive with gasoline.

zf trader Feb 1st, 2006 08:24 AM

Don't forget about 20 cents a pound sugar. This has to effect the competitiveness of ethanol.(Ethanol making is a inefficient process to begin with)

Buy1Sell2 Feb 1st, 2006 08:49 AM

sugar will go to 60 or 70 cents long term

futures_shark Feb 1st, 2006 08:59 AM

Since 98 the long term average price (5years) of sugar had been going down before the recent spike up. For oil it had been going up.

Today Oil is up ~400% from '98 price levels compared to sugar up ~200%. The recent runup in sugar may be a result of the realization that ethanol can be competitive with gasoline.

I haven't researched this topic much, it's just an idea.

Buy1Sell2 Feb 1st, 2006 09:13 AM

you are right on the money. Sugar is he new oil play. It will increase 4 or 5 fold from here where oil probably has another 2 or 2.5 fold increase. (long term)

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