Brazil’s cane output to return to decline in 2016-17
Category: Sugar
(Agrimoney) – Kingsman highlighted the stagnation in Brazil’s cash-strapped cane crushing industry, foreseeing a return to declining volumes in 2016-17, as producers’ failure to replant the crop reduces yields.
The sugar cane crush in the Centre South region, Brazil’s main sugar-growing area, will fall by at least 15m tonnes to 570m tonnes in the 2016-17 season, which starts in April next year, Platts Kingsman said in an initial forecast.
This would represent the lowest crush in four years, on data from Brazil’s ethanol and sugar industry group Unica, and keep the harvest well below the record 596.9m-tonne record achieved in 2013-14.
It would also highlight the change of fortunes in the sector, which doubled cane output in the decade running up to the record high.
Ageing cane
The forecast by Swiss-based Kingsman reflected expectations of a dent to cane yields from depressed replanting rates, leading to older and less productive crop.
The average age of the cane will rise by 0.2 years to 3.7 years in 2016-17, “further from the ideal age of 2.8-3 years”, the analysis group said.
“As the age of cane is increasing due to lower renovation rates, we think there will be an impact on next year’s crop.”
The group also counted on 10m tonnes of “cana bisada”, cane that is left uncut in the fields from the previous season.
Kingsman estimated Centre South sugar production for 2016-17 at 31.27m tonnes, down 5.9% from 33.22m tonnes expected for this season.
2015-16 estimates raised
The forecast follow a flurry of strong harvest estimates for Brazil’s ongoing, 2015-16 sugar cane harvest.
Rains in February and March are viewed as having improved the growth of the crop, although high moisture reduces the yield of sugar per tonne of cane.
Earlier this week, sugar and ethanol consultancy Job Economia estimated the Centre South cane harvest at 587m tonnes, up 2.8% year on year.
INTL FCStone pegged the harvest at 583m tonnes.
Last week, trading house ED&F Man lifted its forecast for the crop by 8m tonnes to 588m tonnes, an upgrade “driven by improving weather developments”.
