A steep decline in sugar and oil prices over the last six months has diminished the hope of financial recovery for a number of Brazilian mills, and could put new dealmaking in the sector on hold. Raw sugar prices in New York SBc1 were hovering around 13 cents per pound, down around 40 percent since the fourth quarter of 2016 to a level. At the same time, an ongoing slump in oil prices CLc1 LCOc1 has led state-controlled oil firm Petrobras (PETR4.SA) to repeatedly cut gasoline prices domestically. That has in turn pressured ethanol producers to follow suit since the two fuels were sold side by side at the pump. The price pressure on sugar and ethanol could cut short a nascent financial recovery for many Brazilian mills during a global sugar supply deficit in 2015 and 2016. It could also slow down talks between millers and potential investors and lead to more closures of indebted firms.