Tereos underpinned expectations of a further rise in Brazil's
cane production in 2013-14 by saying that its own operations would enjoy a 10%
increase in volumes, as the cereals-to-sugar giant unveiled a rise of nearly
one-third in earnings.
The French-based co-operative, whose Guarani subsidiary it
Brazil's third-ranked sugar and ethanol producer, said that its cane volumes in
2012-13 had risen by 12% to 18.2m tonnes.
That pace is ahead of the 8% production rebound achieved as a whole in Brazil's Centre South region, responsible for nearly 90% of domestic
production, where Guarani is based.
And Tereos flagged "prospects of a further growth of more
than 10% for the next campaign", which starts in April.
Ethanol vs sugar
This would be marginally behind the rate of increase of 11%,
to 590m tonnes, in Centre South output as forecast by Unica, the Brazilian cane
However, Tereos appears, thanks to ties with Petrobas, well
positioned to exploit a cane harvest of which an unusually large proportion, of
54%, is set to go to ethanol on Unica estimates, as a change to blending levels
boosts domestic demand.
Brazil is from June to raise to 25%, from 20%, the amount of
ethanol added to gasoline, the first increase in three years.
Petrobas, the Brazilian state-run oil firm, has a minority
stake in Guarani, and has an ethanol distribution agreement covering 2.2bn litres
over four years.
In 2012-13, 50.4% of Centre South cane has gone to producing
ethanol, with the figure at 51.6% the year before.
With sugar prices declining close to the level of 17.5 cents
a pound which, on Sucden estimates, it becomes more profitable to produce
ethanol, a strong position in the biofuel may prove an advantage in best exploiting
cane in 2013-14.
Tereos, whose Brazil sugar operations are listed in Sao Paolo as Tereos Internacional, said that in Europe, its Czech beet growers had
enjoyed a strong 2012-13 harvest too, with "very high yields" of 79 tonnes per
That was only 2 tonnes below the record level of the
previous season, acknowledged as a bumper year throughout Europe.
However, in France, yields fell to 84 tonnes per hectare
from the all-time high of 96 tonnes per hectare the year before.
The group aims to raise average French yields to 110 tonnes
per hectare by 2020.
Tereos reported a 32% rise to E313m in underlying earnings
for the year to the end of September, on revenues up 14.2% at E5.04bn, a
performance termed "outstanding" by Alexis Duval, the Tereos chief executive.
"This performance reflects a positive economic environment
over the past year, as well as the benefits of our long-term strategy marked by
a major industrial restructuring, our successful international expansion and
the development of our product portfolio," he said.
The group has yet to reply to an Agrimoney.com question on
its reaction to a European Parliament vote on Wednesday which throws into doubt
plans by the European Commission to end quotas on the bloc's sugar beet
Tereos, historically the largest beneficiary of EU farm
subsidies, has been seen as a major beneficiary of the quota system.