Brazil’s sugar production will, thanks to improving cane results, prove 1.7m tonnes higher than previously thought, with exports to hit the third largest on record, US officials said, in a briefing which accorded with expectations of a longer crushing season.
The US Department of Agriculture’s Sao Paulo bureau raised to 38.1m tonnes its forecast for 2022-23 sugar output in the world’s top producing country, taking to 2.6m tonnes the increase expected on last season’s result.
The upgrade reflected in part an increased assessment of the quality of cane, which was now expected to produce 139.1 kilogrammes of sugars per tonne, up by 1.8 kilogrammes from the previous estimate
The figure was based on “updated” harvest results, which for Brazil’s key Centre South region, responsible for some 90% of cane production, show an average of 140.0 kilogrammes of sugars per tonne of cane for 2022-23 as of mid-September, according to industry group Unica.
The crushing season started in April.
‘Better yields and output’
Furthermore, the bureau lifted to 621m tonnes its forecast for Brazil’s total cane harvest, taking to 45m tonnes the expansion expected year on year.
This included an upgrade to 563m tonnes in the Centre South crop – up by 40m tonnes from last year’s result, which was depressed by drought and frost damage which extended to the early cuts in 2022-23 too.
“Sugarcane fields have partially recovered from the weather adversities,” the bureau said, adding that “good rainfall volume prevailed since October 2021 and good crop management have supported increased output.
“Despite below-average yields during the first quarter of the season,” up to June, crush results since have witnessed “better yields and output”, as harvesting moves on to “sugarcane fields have been less affected by weather adversities”.
With 406m tonnes of Centre South cane cut for 2022-23 up to the middle of last month – implying more than 150m tonnes yet to crush, under the bureau’s forecast – the report also accords with Unica’s forecast that the region’s mills will need to operate a longer crushing season.
Centre South processors typically shut late in the year, usually a wetter period, making harvesting more difficult of what cane there is left to cut.
While four mills had already closed for the season as of mid-September, Unica reported last week, it said that that 252 were still operating, and that this season’s crush overall “should last longer thanks to better crop development”.
The group added: “It is expected that a greater number of plants will remain in operation during the months of November and December, contrary to what happened in 2021,” when the frost and drought setbacks reduced the Centre South cane harvest to a 10-year low.
Sugar vs ethanol
Weak prices of ethanol, made in Brazil mainly from cane, had further supported the cause of sugar production, in encouraging mills to concentrate on turning crop into sweetener rather than biofuel.
Research institute Cepea said earlier this week that, in Sao Paulo state, 2022-23 prices of anhydrous ethanol, as blended into gasoline, have been 6.2% lower year on year in real terms, with those of hydrous ethanol, an alternative to gasoline, down by 7.8%.
The USDA bureau said: “Ethanol consumption has not recovered from pre-pandemic volumes and producers are likely to keep focusing on sugar production.”
It nudged higher by 0.2 points, to 45.2%, its forecast for the proportion of Brazil’s cane turned into sweetener.
Sugar output at the level of 38.1m tonnes will support exports of 28.2m tonnes, the bureau said – a figure 1.6m tonnes above the USDA’s official forecast, and representing Brazil’s third best result on record.
“Brazil remains the major worldwide sugar exporter and the steady devaluation of the local currency, the real, vis-à-vis the US dollar, keeps the Brazilian product highly competitive.”
China is typically the top buyer of Brazilian sugar exports, with Algeria, Bangladesh and Nigeria also major importers.