Back
August 17, 2012

Brazil's Sugarcane Shows Modest Growth after Last Year's Low

Brazil's 2012/13 sugarcane harvest is expected to show a modest increase this harvest season due to increased tonnage from newly planted cane replacing ageing sugarcane. Producers took advantage of government programs aimed at replacing the ageing sugarcane crop in southern Brazil. Once a sugarcane crop reaches 5-6 years of age, its productivity starts to decline about 10% each year it gets older. The total sugar production in Brazil is expected to increase 5.7% compared to the 2011/12 harvest season and ethanol production is expected to increase 4.5%. Even with these increases, sugar production is only back to where it was two years ago.

Even though the tonnage is higher than last year, the amount of Total Recoverable Sugars is lower than last year. The Total Recoverable Sugars is currently running at 116.5 kilograms per ton, which is 3% less than the 120.1 kilograms recorded last year. Part of the problem is that the rainfall this year has been falling contrary to the normal pattern.

During the summer growing months (November to May), southern Brazil endured a severe drought, which resulted in reduced sugarcane growth, but thus far during what is normally the dry season which began in May, there have been heavy rains in southern Brazil. Apparently since it was dryer than normal earlier in the year, the sugarcane plants absorbed a greater than normal quantity of water in June and July. This resulted in increased growth of the sugarcane, but a reduced amount of total recoverable sugars. Thus far in August, the weather has been dry and if it continues that way, the total recoverable sugars should improve this month.

According to the Union of Sugarcane Industries (Unica), Brazil is expected to produce 33.1 million tons of sugarcane in 2012/13, the same amount that was produced two years ago during the 2010/11 harvest season.

While this modest improvement is encouraging, it is a far cry from what the industry had been hoping for. Instead of the robust growth in sugarcane production that the industry had anticipated, production has stagnated over the last few years. The reasons for the disappointing results include: poor weather, lack of investments, an ageing sugarcane crop, government policy, and slow economic growth.