Sugar touches three-month-low, on Unica data

(Agrimoney) – Sugar prices eased, as data from Brazil’s main cane growing region showed that the wet harvesting season has not affected sugar production as badly as had been thought.

Data from Brazilian cane body Unica showed that cane crushed at the end of last month in the Centre South region were yielding more sugar than had been expected.

The Centre South accounts for most of Brazil’s sugar production.

Front-month sugar futures dipped to a three-month low of 13.93 cents a pound on the news.

Unseasonal rains

The south of Brazil has seen unusually heavy rainfall throughout the cane cutting season, which has been attributed to the effects of El Nino.

The unseasonal rains have delayed this year’s harvest, but also lowered the proportion of sugar that can be recovered from the crop.

Heavy rains prompt rapid growth of the cane, expending sugar reserves on growth, and dilute the amount of sugar available.

Exceeding expectations

But the latest data suggest the rains have not affected the sugar content as badly as had been feared.

The proportion of recoverable sugar in cane crushed in Brazil’s Centre South during the second half of December was reported at 119.28 kg per tonne of sugar cane.

This is a well behind the levels of sugar found in cane last year, but exceeds analyst expectations.

Before the data was released, sugar analysis Platts Kingsman forecast sugar the proportion of recoverable sugar at 108.54 kilogrammes per tonne.

Higher production

In total, sugar mills in the Centre-South region produced 383,000 tonnes of sugar in the second half of December.

Kingsman forecast total production over the period at 289,600 tonnes.

The higher than expected production was down to the high proportion of recoverable sugar, a larger than expected volume of cane crushed, and a greater than expected volume of the harvest diverted away from ethanol production, and toward sugar production.

Larger crush

The volume of the cane crush, the total amount of sugarcane processed, was slightly higher than expected as well, at 10.40m tonnes, well ahead of the 3,687 tonnes crushed over the same period last year.

Kingsman forecast the crush at 10.02m tonnes.

The high rate of production at this late point in the sugar season is down to delay in cane cutting earlier in the season, due the heavy rains.

And of the cane crushed, a higher-than-expected proportion was diverted to sugar production.

32.23% of cane processed went to sugar production, compared to the 28.23% that Kingsman forecast, with the remainder of cane being processed into ethanol.

New York raw sugar futures for March were down 0.4% at 14.10 cents a bushel in morning deals.