Brazil's Unica Cuts Center-South Sugarcane Crush Estimate Because of Drought
08/26/2014 | 11:17am US/Eastern
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By Jeffrey Lewis
SAO PAULO--The worst drought in decades in Brazil's center-south region will cut the area's sugarcane crop by 8.6% in the current growing season compared with a year earlier, sugar-industry group Unica said Tuesday.
The region, which produces about 90% of Brazil's cane, will produce 545.9 million metric tons of the crop in the current 2014-2015 season, compared with 597.1 million tons in the 2013-2014 season. Unica and Brazil's Cane Technology Center had earlier forecast a crop of 580 million tons for 2014-2015.
Brazil is the world's biggest sugar producer and exporter, and the decline in output of the sweetener has boosted prices on world markets.
In the early part of the harvesting season, the drier-than-normal weather made it easier for farm equipment to enter fields and helped accelerate the harvest and boost sugar and ethanol output above normal levels.
With much of the crop now harvested, mills are starting to crush less than they did a year earlier and the season is expected to finish earlier than normal.
"Traditional cane regions have been severely affected by the drought, and that should lead to an earlier end to the harvest and impede the harvest in areas where the plants didn't develop enough to be cut," explained Unica's technical director, Antonio de Padua Rodrigues.
Mills in the center-south region crushed 44.9 million tons of cane in the first half of August, a decline of 3.4% from the same period a year earlier. Sugar output fell 4.3% in the first half of the month from a year earlier, to 2.8 million tons, while ethanol production rose 4.4% in the same period to 2.04 billion liters.
The production mix of sugar and ethanol in the first half of the month was 45.7% sugar and 54.3% ethanol, compared with 47.9% sugar and 52.1% ethanol a year earlier.
Mills in the center-south crushed 325.3 million tons in the cane-growing season through Aug. 15, an increase of 2.8% from the same period a year earlier. Sugar output rose 6.4% in the period to 17.9 million tons and ethanol production rose 4.5% to 13.9 billion liters.
The production mix for the season through Aug. 15 was 44.2% sugar and 55.8% ethanol, compared with 43.7% sugar and 56.3% ethanol a year earlier.
Write to Jeffrey T. Lewis at jeffrey.lewis@wsj.com
www.4-traders.com/...ush-Estimate-Because-of-Drought-18953090/
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