Brazil to lift sugar output despite drought damage

Brazil forecast growth in its cane harvest, and sugar output, in the newly-started season, despite the drought in its main sugar-producing region, seeing a rise in area more than offsetting lower yields.

Brazil's Conab crop bureau, in its first estimates for the country's cane, ethanol and sugar output in 2014-15, pegged the cane harvest at a record 671.7m tonnes, up 2.0% year on year.

Sugar production will rise even faster, by 4.2% to 39.5m tonnes, despite a small drop in concentrations of the sweetener in cane, by 1.0 kilogramme to 133.4 kilogrammes per tonne of the crop.

Ethanol output will rise by only 1.5% to 412.2m litres, implying an expectation of a swing by cane mills to producing sugar rather than the biofuel, encouraged by the recovery in prices of the sweetener.

'Lack of rain, high temperatures'

Conab acknowledged the drought which hit much of the Centre South region, responsible for some 90% of Brazil's cane production, from December to February,

"Only in central Goiás and the south west of Mato Grosso were favourable conditions observed for vegetative growth in sugar cane sugar," the bureau said, cautioning of particular setbacks in central Sao Paulo, the top producing state.

"The lack of rain combined with the high temperatures impacted productivity," with crops in parts of Mato Grosso do Sul and Parana nursing damage from frost last year too.

Centre South cane yields will fall by 2.6%, led by a 4.5% decline in Sao Paulo state.

Extra area

However, the region's cane crop will rise 1.8% year on year nonetheless to 612.9m tonnes, boosted by a 4.5% increase to more than 8.0m hectares in harvested area.

"This increase is concentrated in states that had the largest increase in new mills, and corresponds to the consolidation of the areas of these new businesses," Conab said, singling out Sao Paulo, Mato Grosso do Sul, Goiás, Minas Gerais and Paraná.

The estimate for the Centre South cane harvest is far larger than that from some other forecasters, with Copersucar and Rabobank forecasting figures as low as 570m tonnes.

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