April 16, 2012

Brazil's Sugarcane Prod. Up and Ethanol Imports Down in 2012/13

Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.

The Union of Sugarcane Industries (Unica) estimates that the sugarcane tonnage in southern Brazil, which accounts for 90% of Brazil's total production, will increase 3.2% in 2012/13 to 509 million tons compared to 493 million tons last harvest season. The productivity per hectare is expected to remain unchanged from last year at 68.7 tons per hectare and the 3.2% increase is the result of increased acreage. Brazil's sugarcane acreage increased 3% principally due to increased acreage in Mato Grosso do Sul, Goias, and Minas Gerais.

The last sugarcane harvest in Brazil was very disappointing due to adverse weather, lack of investments, and an ageing sugarcane crop. In fact, the reduction in sugarcane production last year was the first decline in a decade. Producers had been hoping for a much better crop this year, but dry weather during February and March hurt development of the sugarcane crop.

In Conab's first estimate of the 2012/13 sugarcane crop, they are more optimistic and they estimated the sugarcane production in southern Brazil at 532 million tons or 6.1% more than last year.

Unica estimated that sugar production in southern Brazil would increase 5.7% in 2012/13 to 33.1 million tons compared to last year's production of 31.3 million tons. They also estimated that ethanol production in southern Brazil would increase 4.5% to 21.5 billion liters.

Unica estimates that Brazil will reduce its ethanol imports by 66% during the 2012/13 crop year compared to the previous year. Last year, Brazil imported 1.5 billion liters of ethanol, but Unica estimates that ethanol imports during 2012/13 will be 500 million liters.

The sugarcane harvest in southern Brail generally starts in late March or early April and ends in December.