Apr 29, 2010
Sale of Sugarcane Harvesters Up Sharply in Brazil
Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.
The demand for mechanical sugarcane harvesters in Brazil is so great that many customers must wait months for delivery of a new harvester and existing harvesters are setting idle due to a lack of spare parts. The two companies that dominate the manufacture of sugarcane harvesters, Case and John Deere, both are reporting sales increased of 30% to 60% for the first trimester of 2010 compared to 2009. The industry as a whole is expecting sales of 1,200 units in 2010 as compared to 970 units sold in 2009.
Foreign investment money has been pouring into Brazil's sugar/ethanol sector in recent years and these investors are strongly capitalized. These investors want their sugar/ethanol operations to run as efficiently and as cheaply as possible. Using mechanical sugarcane harvesters offers both of those advantages as compared to cutting the cane by hand.
Mechanical harvesting is also required to meet new environmental regulations designed to phase out the old practice of burning off the dry leaves before the cane is cut by hand. The burning process released a large amount of particulate matter into the air that caused respiratory problems in nearby communities.
Ideally customers would order a new harvester in September or October and take delivery in February or March in time for the start of the sugarcane harvest. But this time, many customers waited until January or February to order their harvesters because wanted to be sure the economic recovery was already in place. It's these late orders that Case and Deere are scrambling to fill.
Case for example, has been air lifting in engines and spare parts in order to accelerate the manufacturing process. The Case factory in Brazil can manufacture five harvesters per day with one shift. They would like to add another shift, but they can't get enough parts from their suppliers to operate a second shift, at least not yet.
The John Deere sales director for Brazil, Wemer Santos, indicated that their factory is operating at 100% capacity as compared to 80% in 2009. Deere is expecting to sell 30% more harvesters during the first trimester of 2010 as compared to the same period in 2009.
The industry as a whole is expecting to sell 50% to 55% of their harvesters during the first trimester of 2010. Last year 450 units were sold during the first trimester and this year they are expecting sales of 600 units.