Linked In
News In
Linked In

You are viewing 1 of your 2 complimentary articles.

Register now to receive full access.

Already registered?

Login | Join us now

Brazil nudges higher sugar output estimate, despite cane crop downgrade

Twitter Linkedin eCard

Conab edged higher its forecast for Brazil’s sugar production this season, despite a downgrade to the cane production forecast, saying that what had been harvested had been of higher quality.


The official Brazilian crop bureau, updating estimates made four months ago, lifted by 74,000 tonnes to 39.46m tonnes its forecast for overall domestic sugar output in 2017-18, on an April to March basis.


However, the modest upgrade, which lifted by 0.3 points to 2.0% the growth expected in Brazilian sugar output year on year, disguised some significant shifts in underlying data.


The estimate for Brazil’s cane harvest, for instance, was downgraded to levels 22.5m tonnes below those last season, and the estimated proportion turned into sugar lowered too – but these factors were more than offset, in sweetener output, by a higher concentration of sugars in cane.


Cane area shrinks


Conab cut its estimate for the domestic cane harvest by 10.7m tonnes to 635.6m tonnes, reflecting in the main a downgrade to output in Sao Paulo, the main growing state, which is part of the key Centre South region - where the crushing season has already ended for many mills.


Despite improved weather which has blessed this season’s cane harvest, “the extent of area reductions seen in the main producing states of the Centre South region” has depressed output estimates, the bureau said.


In Sao Paulo, the estimate for cane area was lowered by 44,000 hectares to 4.51m hectares, taking it 264,000 hectares below last year’s total.


Ethanol vs sugar


Furthermore, the bureau trimmed to 47.1%, from 47.9%, its estimate for the proportion of cane being turned into sugar, rather than ethanol.


While sugar proved relatively popular compared with ethanol early in the crushing season “in the last few months, mills started to allocate most of the sugar cane production to ethanol output due to the higher profitability in the sale of ethanol”.


Ethanol prices had been boosted by “successive increases in prices of gasoline”, with which the biofuel competes for demand, while sugar values started a “downward trend”, undermined by factors including “the expectation of a surplus” of the sweetener on the world market.


Weather factor


Nonetheless, these dents to sweetener production dynamics were more than offset by an increase in the so-called ATR - the level of recoverable sugars in cane – which was pegged at 139.1 kilogrammes per tonne of cane in the Centre South, an upgrade of 5.5 kilogrammes per tonne of cane.


The upgrade reflected “weather during cane harvesting”, Conab said.


“While autumn 2017 has been more rainy than the autumn of last year, the winter of 2017 was drier in the producing regions, which favoured the accumulation of ATR.”


Wetter weather is seen as “diluting” sugar levels in cane, and can encourage flowering, undermining crop quality.


Centre South estimates


For the closely-followed Centre South region, sugar output was pegged at 36.44m tonnes, an upgrade of 345,000 tonnes.


The impact of a downgrade of some 8.5m tonnes, to 588.7m tonnes, in the cane harvest estimate was more than offset by the increased volume of recoverable sugars that mills gleaned from the crop.

Twitter Linkedin eCard
Related Stories

Evening markets: Ags outperforrm broader commodities for once, despite cocoa tumble

Agricultural commodities close higher overall, helped by the likes of corn, cotton and soymeal - but not wheat, which suffers after poor US export data

Evening markets: India helps cotton rise close to 8-month high, but spoils sugar market

... with ideas of a return by exports to India helping send white sugar prices to a two-year low. In grain markets, winter wheat outperforms spring

Associated British Foods cuts sugar profit hopes, citing EU price tumble

Shares in the clothes-to-feed group hit a nine-month low, after it reveals a hit from the particularly strong slide in EU sugar prices, after market liberalisation

Morning round-up, Thursday January 18

Associated British Foods quarterly trading update... JBS USA sells US feeding assets and farms... Cargill investing in plant-based protein
Home | About | RSS | Commodities | Companies | Markets | Legal disclaimer | Privacy policy | Contact

Our Brands: Comtell | Feedinfo | FGInsight

© 2017 and Agrimoney are trademarks of Agrimoney Ltd
Agrimoney is part of the Briefing Media group
Agrimoney Ltd is registered in England & Wales. Registered number: 09239069