Brazil expected to harvest second-largest sugarcane crop in history

The prolonged drought and high temperatures affecting several states in Brazil’s Center-South region are expected to have limited effects on the country’s sugarcane production in the 2024/25 season. While the weather will impact crop productivity, investments by producers and the expansion of harvested areas are likely to mitigate the reduction in sugarcane crushing.

The latest survey by the National Supply Company (CONAB), released on Thursday (08/22), presented revised projections for area and productivity in the Center-South region that are even higher than initially estimated in April. As a result, CONAB’s new estimate predicts a sugarcane crushing of 626.2 million tonnes this season, 745,000 tonnes more than projected in April. This suggests that the current harvest will be 4.1% lower than the record set in the previous cycle, making it the second-largest in history.

Private sector forecasts for sugarcane crushing have been more varied. Datagro, for instance, projects that mills will process 602 million tonnes, while FG/A maintains its estimate at 620 million tonnes.

CONAB attributes the adjustment in the Center-South’s productivity outlook to “better cultural practices adopted by some units.”

According to analysts, a drought was expected this year. Although it will affect productivity, the comparison is being made against a record agricultural yield of 87.2 tonnes per hectare in the 2023/24 season.

However, this doesn’t mean that the drought won’t take its toll this season. “Most of the producing areas have been experiencing about 170 to 180 days without significant rainfall,” said meteorologist Willians Bini. Even in areas that received rain during the last cold front, such as Franca, Ribeirão Preto, and Sertãozinho in São Paulo state, the “very low volume of rainfall did not reverse the water deficit.”

If productivity depended solely on the weather, the losses would be greater, said Fabio Marin, a professor of agrometeorology and agricultural modeling at the University of São Paulo (USP) and coordinator of the Tempocampo System. “Our estimate is a 9.1% drop in productivity, based on simulation models, assuming stable management practices,” he stated.

CONAB’s new projection for sugarcane productivity in the Center-South is 81.7 tonnes per hectare, a 7.1% decrease from last season’s record of 88.2 tonnes per hectare. Despite this decline, yields are still higher than those of two seasons ago when productivity was 73.3 tonnes per hectare.

In addition to revising estimates for the Center-South, CONAB also increased its projection for the sugarcane harvest in the Northeast and North by about 3 million tonnes, bringing the total to 63.7 million tonnes. If this projection holds, the harvest in these two regions will grow by 5.4% compared to the previous season. Consequently, the new estimate for Brazil’s total production is 689.8 million tonnes, 3% below the 2023/24 season.

With about half of the sugarcane crop already harvested, CONAB now expects a slightly less sugar-focused production mix than projected in April, amid rising demand and prices for hydrous ethanol. The agency now forecasts sugar production in the Center-South at 42 million tonnes (a 1.4% reduction compared to the previous estimate) and cane ethanol production at 26.3 billion liters (4.7% more than projected in April).

For the Northeast and North regions, CONAB expects higher sugar production and lower ethanol output. The new estimates are 3.9 million tonnes of sugar and 2.2 billion liters of the biofuel.

Source: Valor International; original text available at https://valorinternational.globo.com/agribusiness/news/2024/08/23/brazil-expected-to-harvest-second-largest-sugarcane-crop-in-history.ghtml 

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