Brazil's 2012-13 center-south cane output should rise about a tenth to between 540 million and 560 million tonnes, up from 492 million in the almost-finished 2011/12 harvest, sugar and ethanol consultant Job Economia said on Thursday.
If the upper end of Job's forecast was achieved, that would restore cane output to around the record level reached in 2010/11, the season before output tumbled due to a mix of bad weather and delays in renewing less productive, ageing plants.
"There's potential to repeat the record 2010 crop," Julio Maria Borges, Job Economia president told Reuters, pointing to an estimated 8 percent rise in the total cane-planted area, which would be a key factor behind the recovery, he said. "Everything will depend on the climate," he said. The 2012/13 cane harvest will begin around March and analysts say it will need plentiful rains until then. January has had fairly average rains so far following a drier-than-usual December.
Job's estimate is a good deal higher than another estimate given on Thursday by Macquarie Bank, which put the 2012/13 crop in the main center-south cane belt at 520 million tonnes. Brazil's center south grows 90 percent of the cane in the world's top producer, with Sao Paulo producing the bulk of it. The 2012/13 harvest will begin around March.
The drop in output last year was the first in a decade of rapid expansion for cane and put a damper on Brazil's big ambitions for a sector which turned cane ethanol into a mainstream fuel with millions of flex fuel cars on its roads. The government is also anxious for Brazil to raise ethanol output as lower supplies have pushed up prices at the pump, making it harder to fight naggingly high inflation.
The agriculture ministry and state development bank BNDES have both announced financing packages to provide incentives for growers to renew ageing cane plants and expand planted area. A cane shortage has made ethanol uncompetitive with gasoline, which flex-fuel cars can also burn. It also prevents Brazil exporting to the US market which it has long coveted and which scrapped its import tariff on the biofuel on December 31.
In the coming crop's favour is a fairly positive weather outlook at least for the short term, with beneficial rains that have soaked fields in key center-south states set to continue. "(That)will be very good for soil humidity and plant development," said Somar. It commented that "Sugarcane fields in Brazil's center-south are in much better shape than at this same period last year,".
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