Jul 22, 2021

Coldest Temperatures in 20 Years Impacts Brazil's Sugarcane

Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.

A second mass of cold air within three weeks swept across southern Brazil earlier this week resulting in three consecutive nights of frosts/freezes. The region had already experienced three nights of frosts at the end of June and early July, and these have been the coldest temperatures in 20 years.

Freezing temperatures were recorded in dozens of Brazilian cities including the city of Ribeirao Preto in the state of Sao Paulo which is considered the heart of sugarcane production in Sao Paulo. This was the fourth frost this year in the region with temperatures as low as -1.5°C and the most severe according to the President of the Rural Union of Ribeirao Preto.

According to an interview in Noticias Agricolas with Beatriz Pupo - senior analysts with S&P Global Platts Analytics, the most recent frosts affected approximately 20% of Brazil's sugarcane production.

Even before the recent frosts, the sugarcane crop had already been negatively impacted by a severe drought in the region. In their latest assessment, Conab estimated the 2021/22 sugarcane production in south-central Brazil at 574.8 million tons, which is down 4.6% compared to last year, but many private analysts are much more pessimistic concerning the crop.

Pupo had expected the sugarcane production to be down 10-15% from the drought alone. Before the frost occurred, Pupo expected the sugarcane production in south-central Brazil to be 547 million tons, but she now expects the production to be even lower. Some large commercial producers are expecting the sugarcane production to be as low as 510 million tons. The full extent of the losses due to the freezing temperatures will not be known for a week or two and the 2021/22 production could be the lowest in nine years.

With one frost after another, the President of the Rural Union expects that Brazil's sugar production could be as low as 31 million tons, which would be down 7.5 million tons from last year.