In 2010, Shree Renuka Sugars made waves when it journeyed to Brazil to purchase stakes in Grupo Equipav Açúcar e Álcool and Vale do Ivai, two local sugar and ethanol producers. The US$332 million investment, originating from Belgaum in northern Karnataka, was India’s largest in Brazil at the time and was expected to break new ground in agribusiness between Brazil and India according to Pedro Aguiar de Freitas, a senior partner at Veirano Advogados, who advised Renuka on the deal.

Six years later, a bitter reality has eclipsed this promising forecast. Brazil’s declining economy and depreciating real hit Renuka hard, while surplus sugar production added further woes. According to the company, raw sugar prices plummeted to a record low at the end of August 2015 due to higher than estimated sugar production in India, Brazil and Thailand. On the flip side, future sugarcane yields in Brazil may be threatened by drought conditions.

Renuka’s Brazilian subsidiaries reported a loss of around ₹15.8 billion (US$233 million) for the year ended 31 March 2015 on account of lower earnings before interest, tax, depreciation and amortization, and high foreign exchange variation charges.

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