Peru's government will complete divesting itself from the country's sugar mill industry, completing the change in agrarian policy in the country started in 1997 and marking the end of government involvement that sector has seen since 1969, Bloomberg News said Wednesday.
The development is expected to help boost sugar production in the country and, consequently, send world sugar prices down.
The Peruvian government plans to transfer its stakes in three mills, Empresa Agroindustrial Pomalca, Empresa Agroindustrial Cayalti and Empresa Agroindustrial Tuman to workers in those concerns, in exchange for unpaid benefits.
These companies have been inefficient due to poor state management, Jose Leon, president of Peru's congressional agricultural committee, told Bloomberg News.
Peru's sugar production has increased as the government has privatized its assets in sugar mills.
The markets seemed to expect further supply shocks to result from the action.
Raw sugar for May delivery fell Wednesday to 24.01 cents a pound on the Chicago Mercantile Exchange, a drop of .17 percent, after having gone down 2.6 percent on Tuesday, when the news broke.