The cane crush in Brazil’s key Centre South region accelerated even faster than investors expected in the last half of October, and should play catch-up with last season by the end of this month.
Crushers in the Centre South, which is responsible for some 90% of the country’s cane production, processed 31.5m tonnes of the crop in the last half of October, industry group Unica said.
That represented an unusual acceleration in crushing from the 27.9m tonnes processed in the first half of the month, with mills typically winding down operations at this time of year as the region’s rainy season kicks in.
Indeed, compared with the last half of October 2021, mills processed 85% more cane, Unica said, noting that last year many plants shut early after drought diminished cane volumes.
“The significant increase” in the crush achieved in the second half of last month “is strongly related to the early closure of production units in the previous harvest, due to the drought that severely hampered the development” of cane in 2021, the industry group said.
As of the start of this month, 208 mills were still operating – more than 60% above the 128 plants still working as of November 1 last year.
Yields of harvested cane were also in October well above year-ago levels, up by 21% to 67.3 tonnes per hectare, thanks to this year’s improved rainfall.
The latest crush performance narrowed to 14.5m tonnes the lag in this year’s cane crush compared with last year, when harvesting was accelerated by the dry conditions – until mills ran out of crop to process.
And the lag, which stood at 37.0m tonnes at the start of October, is poised to disappear altogether, provided rains do not hamper harvesting too much.
“At the end of November, crushing in the current season should match the previous crop,” Unica said.
The group added that the extent to which this season’s harvest built a lead on the 2021-22 performance, when some 525m tonnes of cane were crushed, would depend on weather conditions. Some analysts see this season’s crush expanding by some 20m tonnes year on year, although Safras e Mercado this week saw volumes remaining little changed.
‘Acute heavy rains’
The growth in cane crush volumes in the second half of last month was reflected in expansion to 2.12m tonnes in sugar production – up by 15.8% from the volume in the first half of October, and by 146% year on year.
The figure also exceeded the total of 1.88m tonnes that investors had expected, according to a poll by S&P Global Commodity Insights.
That figure was based on expectations of a cane crush of 29.5m tonnes – 2.0m tonnes behind the number as reported by Unica.
What S&P termed “acute heavy rains in the Centre South” have made it difficult to judge the pace of harvest.
In New York, raw sugar futures pared losses despite the better-than-expected output figure, with the March 2023 contract standing down 0.2% at 19.35 cents a pound in late deals.
The contract fell as low as 19.08 cents a pound, down 1.5% on the day, in the run up to the data.