Dec 18, 2009
Conab Reduces Estimate Of Brazil's Sugarcane Production
Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.
In its third evaluation of the 2009-10 Brazilian sugarcane crop released this week, Conab reduced their estimate of Brazil's sugarcane production from 629 million tons estimated in September to the current estimate of 612 million tons. The reduction was due to heavy rains that fell between July and November in southeastern Brazil where 90% of Brazil's sugarcane is produced. The heavy rains impeded the harvest and resulted in lower sugarcane yields. They estimate that 20 million tons of sugarcane that were intended to be harvested this year will now be held over until next year's harvest. Even with the current reduction, the 2009-10-sugarcane crop will set a new record in Brazil.
Conab now estimates Brazilian sugarcane acreage at 7.53 million hectares. The leading sugarcane producing state is Sao Paulo with 4.1 million hectares (54% of the total) followed by Parana with 590,000 hectares and Minas Gerais with 587,000 hectares.
The heavy rains not only impeded the harvest, it reduced the sucrose concentration in the sugarcane and as a result, it lowered the sugar and ethanol production. Of the sugarcane harvested in 2009-10, 45% went toward the production of sugar and 55% went toward the production of ethanol. The total sugar production is now estimated at 34.6 million tons, which is down from the 36.7 million tons estimated in September. Total ethanol production was reduced as well. The 2009-10 ethanol production is now estimated at 25.9 billion liters down from 27.9 billion estimated in September. During the 2008-09 season, 26.7 billion liters were produced.
Due to recent price increases for sugar, mill operators in Brazil have adjusted their production toward more sugar and less ethanol. As a result, ethanol supplies will remain tight until the sugarcane harvest resumes early in 2010. Ethanol prices are also expected to remain high until the new harvest begins.
Most sugar mills in Sao Paulo will close down operations at the end of December or early January for annual maintenance. They will resume operations in February or March.