Apr 16, 2010
Sugarcane Harvest Starts Earlier Than Normal In Brazil
Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.
Many of Brazil sugar/ethanol mils started harvesting earlier than normal this year. Of the 400 sugar/ethanol mills in Brazil, 40 started the new production year (April 1st to March 31st) already processing sugarcane and seven of those mills started at least a month earlier than normal. The state of Sao Paulo produces approximately 60% of Brazil's sugarcane followed by Parana with 8% of the total.
The main reason why sugarcane started earlier than normal is because approximately 50 million tons of sugarcane was not harvested last year due to heavy rains last fall that kept harvesters out of the fields. Those 50 million tons represent about 12% of all the sugarcane that will be harvested in Brazil during the 2010-11 harvest season. Total sugarcane production is expected to increase 10% in 2010-11 and ten new sugar/ethanol mills are expected to come on line in Brazil in 2010.
In general, mill operators in Brazil are expected to increase the percentage of sugarcane used to produce ethanol and decrease the percentage used to produce sugar. In 2010-11, 57% of the sugarcane will go toward ethanol production and 42% will be used for sugar production vs. 56% and 43% in 2009-10 respectively.
The anticipation of increased ethanol supplies has already resulted in declining ethanol prices at the pump. In January and February, ethanol prices in Brazil hit record highs and many consumers reverted to using gasoline instead of E100. With the recent declines in ethanol prices, the price of the fuel is once again below 70% the price of gasoline, which makes ethanol the more economical fuel to use in light vehicles.