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January 22, 2013

Brazilian Sugarcane Harvest Benefits from Dryer Weather

With only a few sugar/ethanol mills still processing sugarcane in southern Brazil, the 2012/13 harvest is essentially ended and crop turned out to be a little better than what had been expected earlier in the year. DATAGRO estimates that 535 million tons of sugarcane were harvested in southern Brazil in 2012/13, which is 8.6% more than in 2011/12.

The average sugarcane yield in southern Brazil was 73.3 tons per hectare, which is 8% higher than last year, but still 9.8% below the five-year average. The last four months of 2012 were dryer than normal allowing for an accelerated harvest pace. During November and December of 2012, the precipitation in southern Brazil was in the range of 6% to 24% below the long term historical average for the region. During the 2012/13 harvest season, the average mechanical harvester cut 421 tons of sugarcane per machine per day, which was 2.7% more than in 2011/12.

Approximately 20.5% of the sugarcane in southern Brazil was replanted in 2012/13, which is slightly above the average of 18%, and the condition of the newly planted sugarcane is rated as very good. DATAGRO is estimating that the 2013/14 crop in southern Brazil will yield 580 to 590 million tons.

While the sugarcane crop in southern Brazil has shown improvement this year, it still has not fully recuperated from several years of adverse weather and a lack of investments in new sugar/ethanol mills and new sugarcane production. Industry participants continue to be frustrated by the slow recuperation and lack of significant growth in the sector. Dozens of new sugar/ethanol mills will be needed in Brazil before 2020 just to meet the expected growth in domestic ethanol demand, but new investments in the sector have essentially dried up.