Brazil's record sugar cane harvest 'nearly over'

The sugar cane harvest in Brazil's key Centre South region is "nearly complete" after setting a record 584.1m tonnes in the first nine months of the season, underpinned by relatively strong activity  through the Christmas period.

Mills in the Centre South, responsible for the vast majority of domestic sugar production, crushed 5.94m tonnes of cane in the second half of December, up 88% year on year, industry group Unica said.

Such a volume - unusually high for a period when the onset of seasonal rains, besides holidays, prompts mill shutdowns was supported by the number of plants remaining open, at 115 compared with 70 a year before.

And it took to a record 584.1m tonnes the volume of cane crushed in the first nine months of 2013-14, which began in April, a rise of 11.8% year on year.

'Few mills remain active'

This volume is only some 3m short of the volume that Unica has forecast for the whole season.

However, the crush is expected to tail off rapidly this month, with the number of mills still operating falling to 12 mills.

"The current harvest is almost complete, as few mills remain active, with production marginal," Antonio de Padua Rodrigues, the Unica technical director, said.

Sugar vs ethanol

The wind-down implies Brazilian sugar output remaining below 35m tonnes in 2013-14, only marginally above that last season, with mills diverting more cane to ethanol instead.

In the second half of December, mills used only 38.4% of cane for making sugar, down from 44.1% a year before, although the greater volume of cane meant output rose above 250,000 tonnes for the period.

As of January 1, Centre South mills had in 2013-14 produced 34.3m tonnes of sugar, up only 0.6% year on year, despite the record cane volumes.

Market reaction

The immediate impact on markets was to extend losses in New York's benchmark March raw sugar contract, which touched 15.43 cents a pound, only 0.02 cents from matching a three-year low.

The contract stood at 15.46 cents a pound at 11:15 local time (16:15 UK time), down 0.9%.

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