BRAZIL: Datagro sees 2018/19 smallest crush in five years

Published: 03/14/2018, 4:25:15 PM

Brazil's centre-south, the world's largest sugar producing region, is expected to crush the smallest amount of cane in five years from the new crop that kicks off in April, as aging fields lead to lower yields, consultancy Datagro said on Wednesday, according to Reuters.

Datagro's chief analyst Plinio Nastari said in a presentation during a seminar in Ribeirão Preto that centre-south mills would crush only 577 million tonnes of cane in the 2018/19 cycle compared to a revised estimate of 597 million tonnes in the previous season.

"Cane field renovation has been far from ideal. Cane fields are old, on average they are above 3.7 years old," said Nastari, who added that the crop suffered with a drought late last year. Recent rains were not enough to compensate for lost production potential, he noted.

Datagro projected the centre-south will produce 31.6 million tonnes of sugar in 2018/19, well below production of around 36 million tonnes in the previous season.

Nastari sees ethanol production edging up to 26.7 billion litres in 2018/19, compared with 26.15 billion forecast for the previous crop, with mills allocating more cane to produce the biofuel due to better prices and strong local demand.

"There is clearly an advantage for mills to earmark more cane to ethanol production," said Nastari, who estimates current ethanol values are equivalent to a virtual price for raw sugar in New York of around 17 cents per pound.

Nastari said Brazilian mills have been adjusting to achieve greater production flexibility, increasing or reducing the allocation of cane to sugar or ethanol production according to price levels and market demand.