Apr 21, 2022

Adverse Weather Impacted Brazil's 2021/22 Sugarcane Production

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

Adverse weather in Brazil has led to a disappointing 2021/22 sugarcane crop. In their fourth assessment of the sugarcane crop in Brazil, Conab reported that Brazil harvested 585.2 million tons of sugarcane in 2021/22, which was down 10.6% compared to the previous year.

The problem with the 2021/22 crop was a severe drought during much of the year and a series of frosts in June and July of 2021 that reduced productivity. The drought was one of the worst in recent memory and low temperatures in June-July-August in south-central Brazil added to the problems. Additionally, many producers harvested their sugarcane earlier than normal to avoid even further losses.

In addition to low yields, Brazil's sugarcane acreage also declined in 2021/22 to 8.3 million hectares (29.5 million acres), which was down 3.5% from 8.6 million hectares (21,2 million acres) the prior year. Strong revenues from rival crops such as soybeans and corn convinced some sugarcane producers to plant row crops instead of replanting their sugarcane. Sugarcane needs to be replanted every 5-6 years and if row crop prices remain elevated, it may be difficult to maintain Brazil's sugarcane acreage going forward.

The combination of reduced acreage and lower yields resulted in a 15% reduction in sugar production in 2021/22 to 35.05 million tons. Ethanol production in 2021/22 totaled 30.26 billion liters, which was down 7.7%. Ethanol produced from sugarcane declined 10% to 26.78 billion liters, while ethanol produced from corn increased 14.9% to 3.47 billion liters. Corn-based ethanol accounted for approximately 11.5% of Brazil's total ethanol production in 2021/22.

Due to lower sugar production, Brazil's sugar exports declined 19.3% in 2021/22 to 26 million tons. Brazil's ethanol exports declined 38.9% in 2021/22 to 1.8 billion liters.