December 6, 2010
Brazilian Sugarcane Harvest Ending Earlier Than Last Year
Most sugar/ethanol mills in southeastern Brazil close down for the season during the month of December, but this year, a higher than normal number of mills are closing early due to a lack of sugarcane. The deceleration of the sugarcane harvest was evident in the latest crush figures released by the Union of Sugarcane Industries (Unica). During the first half of November, 24.3 million tons of sugarcane was processed in southeastern Brazil, which was 19% less than what was processed during the second half of October. According to Unica, as of November 15th, 76 mills had already closed for the season compared to 17 mills on November 15, 2009. All the sugar/ethanol mills will eventually close down before the end of the month and resume operations next March or April.
The main reason for the early shut down was the extended dry season between April and September that resulted in reduced sugarcane production. The first half of the harvest season (March through June) was very good and crushing volumes were superior to the previous year, but the volumes tailed off during the second half of the harvest season. For the entire harvest season, Unica is expecting that the total sugarcane tonnage will be slightly greater than the previous year, but short of the 570 million tons they estimated in August. Unica is expecting next year's production to be stable compared the current year.
Unica officials also feel that a lack of investment on the part of sugarcane producers also contributed to shorter than normal harvest season. Sugarcane fields need to be replanted every 5-6 years to maintain maximum production, but the financial and credit crisis of the last several years persuaded many producers to forgo replanting longer than normal as a way to preserve their limited resources. By doing so, producers may save money in the short term, but eventually their yield potential starts to decline.