Biosev Cuts Brazil Sugar Forecast 13% on Frost, Drought

(Bloomberg) – Biosev SA (BSEV3), Brazil’s second-biggest sugar-cane processor, cut its harvest forecast by as much as 13 percent after freezing weather and a drought hurt output and stymied efforts to plant new crops.

Biosev reduced its projections to as low as 28.7 million metric tons of cane for this season from 33 million tons after frost last month burned the growing stalk tips, Serge Stepanov, chief financial officer of the Sao Paulo-based company, said today in an interview.

Biosev is seeking to increase the renewal rate at cane fields to boost processing at mills that were running at 74 percent of capacity last year, he said. The worst frost in 12 years in Brazil’s center-west Mato Grosso do Sul state has hampered the growth of seedlings it’s cultivating for planting new stalks later.

The ice “stops the seedlings’ growth so there are less available to put into planting during the rest of the year,” said Stepanov.

The company can crush 37.9 million tons of cane a year and expects its mills to be running at full capacity by the 2016-17 harvest, he said.

The worst drought in half a century in Brazil’s northeast region is also affecting output from two mills it owns there, which will account for about a third of the lower production forecast, he said.

Closely held Raizen Energia SA is Brazil’s biggest crusher of sugar cane.