Submitted by EnergyTechStocks.com

National oil companies (NOCs) concentrated in the Middle East own more than 80% of the world’s known remaining oil reserves. In short, they’ve cornered the market. And yet, this year alone, they will rake in another $1 trillion from their oil exports, according to the U.S. Energy Information Administration (EIA). Even with pressing domestic needs (food, water, electricity), these countries and their sovereign wealth funds keep piling up billions upon billions of investible dollars. Where’s all that money going to go?

How about sugar, especially Brazilian sugar?

The world is stuck between a rock and a hard place. Without increasing amounts of biofuel, chances of keeping up with the ever rising global demand for gasoline are slim at best. Even so, political momentum is building against biofuel because it’s contributing to a global food crisis.

There is no good answer, but with sugar-based ethanol selling for the equivalent of only a little over $30 a barrel of oil, compared with over $80 a barrel equivalent for corn, policymakers may well decide to concentrate almost exclusively on sugar-based ethanol. Whether or not that happens, it isn’t hard to imagine Middle East sovereign wealth funds going after publicly-traded sugar companies, especially those in the sugar ethanol capital of the world, Brazil.

Maybe this won’t happen, given that Brazil and OPEC have been discussing whether Brazil might become an OPEC member. But the closer Brazil comes to becoming a member of OPEC, the more logical it is to assume that sovereign wealth funds in Asia and elsewhere might try to swoop in and buy publicly-traded Brazilian sugar companies while they can. No investor should be surprised if there is a run on Brazilian sugar companies.

As with potash (See Part 1 of this Series), nobody on Wall Street is talking about this yet – at least not in public. But investors may want to keep an eye on a number of Brazilian sugar outfits including Cosan S.A., Clean Energy Brazil, Acucar Guarani and Sao Martinho S.A.