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August 27, 2019

Brazilian Sugarcane Acreage to Decline 2.4% in 2019/20

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

The sugarcane sector in Brazil continues to be under pressure from low sugar prices. Dozens of sugar mills have closed their doors in recent years and that trend may continue with the projection of reduced sugarcane acreage in 2019/20.

In their most recent crop report released last week, Conab estimated that Brazil will harvest 8.384 million hectares of sugarcane in 2019/20, which represents a reduction of 2.4% compared to the prior harvest. Brazil's sugarcane production is estimated at 622.2 million tons, which is down 0.3% compared to last year.

The sugarcane acreage in the state of Sao Paulo, which is Brazil's leading producer, is expected to decline 4.8% or 212,500 hectares to 4.21 million hectares. Sugarcane production in Sao Paulo is expected to decline 2.2% to 325.5 million tons. As the sugarcane acreage declines, soybeans is the crop that is taking over the majority of the previous sugarcane acreage.

In the state of Parana, sugarcane acreage is expected to decline 6.1% to 534,400 hectares and yields are expected to decline 6.1%. Sugarcane appears to be losing out to soybeans and corn production in the state of Parana.

In the state of Minas Gerais, the sugarcane acreage is expected to decline 1.6% to 834,500 hectares as farmers opt for other crops.

Bucking the trend are the states of Goias where the sugarcane acreage is expected to increase 3.4% to 948,300 hectares and in Mato Grosso do Sul where the sugarcane acreage is expected to increase 3.3% to 668,700 hectares.