COMMODITY PRICE INDEX

COMMODITY PRICE INDEX In Brazil, drought is expected to cause a 25% drop in the sugarcane harvest in some regions. This has led to soaring domestic prices for ethanol, which is mixed with petrol to fuel cars. About half of Brazil's sugarcane is used to make 13 billion litres of ethanol a year. Worried about inflation, the government has cut the amount of ethanol mixed with petrol to 20% from 24%. It is also auctioning 100m litres each fortnight from its stocks of 700m litres, and may eventually import some. Brazil has doubled its sugar production in the past six years and exported a record 12m tonnes in 1999. But exports fell by nearly 60% in the first half of 2000, partly because of a late harvest, and because Russia bought less. World sugar-production faces its first shortfall in six years; world prices have doubled in a year to over ten cents a pound.