Brazil Area’s Sugar Output Seen Lower After Rain Curbed Yields
Category: Sugar
(BusinessWeek) – Sugar output in Brazil’s center south, the biggest global producer’s main growing region, will be lower than previously forecast after rains in May and June reduced yields, according to Usina Alta Mogiana SA.
Production will total 33.7 million metric tons in the 2013-14 season begun there in April, the Sao Joaquim da Barra-based miller said in a report e-mailed Sept. 27. That’s down from a June forecast of 34.2 million tons. Output will be smaller than the 34.1 million tons produced in the previous season, data from industry group Unica showed.
While millers will process 580 million tons of sugar cane, unchanged from the June estimate, yields will be 2.5 percent lower than anticipated, according to the report. Producers will make 134.1 kilograms (295.6 pounds) of sugar for every ton of cane crushed, Alta Mogiana estimated, against June’s 137.5-kilogram projection.
“Rains in May and June alongside a higher degree of harvest mechanization are keeping sucrose content lower than previously forecast,” Alta Mogiana said. “With only 30 percent of the harvest still to be completed, it will be very hard to see sucrose content rise above last cycle’s, when it reached 135.6 kilograms a ton.”
Falling ethanol prices in the Brazilian market compared with sugar mean local millers will direct 45.3 percent of all cane crushed to making the sweetener at the expense of the biofuel, according to the report. That’s higher than the previous forecast of 44.8 percent.
Sugar Futures
The price of hydrous ethanol, used in flex-fuel cars, fell 9.8 percent in Sao Paulo from this year’s peak on April 19, according to data published by Cepea, a University of Sao Paulo research group. Raw-sugar futures traded in New York gained 8.6 percent over the past month on speculation of a smaller surplus.
Millers in center south will make 24.8 billion liters (6.6 billion gallons) of ethanol in 2013-14, down from June’s 25.7 billion-liter projection, according to the miller’s report. Hydrous-ethanol output will be 14.2 billion liters and production of the anhydrous variety, blended into gasoline, will amount to 10.6 billion liters, Alta Mogiana forecasts.
