CS Brazil: Lowest Cane Crush Since 2012
May 3, 2021

This is not the first time that dry weather has affected sugarcane in CSB Brazil. But we need to know how much crop failure we should expect and how that will affect sugar and ethanol availability. So we asked suppliers and sugar mill agricultural specialist to give us a feeling of the field and got into the numbers to give you our estimates for the season.

Lowest Cane Crush in Almost a Decade 

The situation in the CS cane fields is critical – our field analysts have seen many areas where the cane does not seem to have developed, with half the internodes that would be expected in addition to cane fields with flaws. Accumulated rains since last October were on average 36% below the normal history for the CS region – the biggest drought seen in more than a decade. The fields must also be older, since the renewal calendar last year was hampered by the drought.

Rains from Oct – March were 86% below average

On the other hand, the cultural treatment of the cane fields has improved in the last 2 years, something allowed by the better cash generation of the mills, which helps to limit losses in productivity. Anyway, the extremely adverse weather combined with last year’s fires left their mark and our expectation today is a 7% drop in agricultural productivity (TCH), putting the cane crush below 560mmt. However a rainier winter, or at least normal rains from now on, may mean a slight recovery of the cane field to be harvested at the end of the crop – October onwards.

Relax! Not everything is lost 

Wait, not all the sugar is lost! drier weather also means a higher ATR than initially estimated – 139kg / ton – and a greater concentration of sucrose in the cane helps to partially offset the reduction in crushing.

In addition to the higher ATR, we should also remember that approximately 80% of the raw sugar production is already priced and committed, therefore, the mills must do their utmost to be able to honour their commitments. We believe that the CS should reach at least 48% sugar mix in 21/22. Based on these, sugar production in the CS should be around 35.6mmt – or 360kmt below the previous estimate.

Brazil sugar forecast: CS should still be the largest producer

Looking at the availability of raw sugar for the world market, it remains very close to what we are running on our balance sheets with a reduction of just 240kmt.

We listened to suppliers and mills in different regions and the message was clear: everyone is concerned with sugarcane development, and believe that there will be a crop failure, but they are not sure of the extent – yet.

Sugar analysis: CS Brazil 2021/22

That’s all for now on sugar production. Ethanol… well that’s a topic for another post.

Author: Ana Zancaner