Sep 09, 2024
Fires in the State of Sao Paulo Impact Brazil's Sugarcane Production
Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.
Hot and dry weather and numerous wildfires have negatively impacted the sugarcane crop in the state of Sao Paulo, which is Brazil's largest sugarcane producing state. According to the Union of Sugarcane Industries (Unica), more than 230,000 hectares of sugarcane have been impacted by the fires. The consulting firm Datagro estimates that 132,000 hectares were sugarcane waiting to be harvested and 99,000 hectares were already harvested and the crop had started to regrow or was sugarcane newly planted this year.
Sugarcane Producers Organization of Brazil (Orplana), which is comprised of 35 associations that represent 12,000 sugarcane producers, indicated that the sugarcane had already been suffering from record temperatures and drought and losses from the drought and fires are estimated at R$ 800 million including sugarcane lost to the fires and lower quality of the burnt sugarcane. Sugarcane impacted by the fires needs to be harvested within 48 hours to avoid a significant decline in quality.
The fires not only impacted the 2024/25 crop, but they may also impact the 2025/26 crop as well. Sugarcane is usually allowed to regrow five times before it is replanted at a significant cost to the producer. Some of the fires impacted sugarcane fields that had already been harvested and had started to regrow. If the regrowth was interrupted, it could impact the 2025/26 production. In a worst-case scenario, the field may have to be replanted before the producer had planned.
The consulting firm Datagro recently lowered their estimate of sugar production in south-central Brazil to 39.3 million tons compared to their previous estimate of 40.0 million tons. Compared to last year, sugarcane production in south-central Brazil is down 9.4% and sugar production is down 7.4%.
Datagro is estimating 2024/25 ethanol production in south-central Brazil at 32.52 billion liters which is down 3.2%. Ethanol produced from sugarcane is down, but ethanol produced from corn is up compared to last year. Corn-based ethanol production in south-central Brazil in 2024/25 is estimated at 8.0 billion liters, which represents 24.6% of the total ethanol production compared to 18.7% in 2023/24.
The consulting firm StoneX estimates that the fires will result in a reduction of 470,000 tons of sugar in south-central Brazil, which would equate to 3% of the anticipated 2024/25 production.