Jul 01, 2014
Brazil's Sugarcane Crop Continues to Struggle with Dry Conditions
Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.
The prospects for the 2014/15 sugarcane crop in Brazil continue to diminish as the main sugarcane producing region in Brazil struggles with a prolonged drought. The drought started in December of 2013 and record high temperatures in December and January impacted the crop to such an extent that it has not expected to recover this harvest season.
Some estimates for the 2014/15 sugarcane crop in southern Brazil are now as low as 560 million tons compared to 597 million tons produced in 2013/14. Southern Brazil is currently in the midst of its traditional dry season, so there is little chance of rainfall until about September. If El Nino induced rains start to materialize in late 2014, the rains would give a growth spurt to the unharvested sugarcane, but the additional growth would come at a cost of lower sucrose content.
When sugarcane starts to grow rapidly, it tends to dilute the sucrose content of the sugarcane resulting in less Total Recoverable Sugars and thus less sugar or ethanol production.
The Total Available Sugars in the 2014/15 Brazilian crop is already expected to be as much as 7% lower than last year's crop and any additional heavy rains during the second half of 2014 could lower it even more. Even though heavy rains might hurt this year's crop, the moisture is desperately needed to replenish the soil moisture going into 2015.
Sugarcane processors in Brazil continue to emphasize ethanol production over sugar production. As a result, Brazil's 2014/15 sugar production is now estimated at 32.3 million tons according to Datagro.
Ethanol producers are hoping that the government will increase the ethanol mixture in gasoline from the present 25% to 27.5% as a means to increase ethanol consumption.
One benefit of the dryer weather has been that the Brazilian ports have been able to operate more efficiently which has reduced waiting times at the ports thus lowering transportation costs. According to data released by Datagro, the freight costs to transport sugar from the main production area of Ribeirao Preto in the state of Sao Paulo to the Port of Santos fell 8.5% compared to the same time last year.