Brazil's sugar production seen falling, despite new plants

SAO PAULO: Brazil's sugar production is seen falling in the new crop that starts in April after unfavorable weather reduced sugar cane development, but new sugar installations in the country should limit that fall, experts said during a conference on Wednesday.

Consultancy Datagro sees Brazil's center-south sugar output falling to 36.7 million tonnes in 2021/22 (April-March) versus 38.5 million tonnes in the previous season, saying mills will crush 3.5% less cane at a total of 586 million tonnes.

Sugar trader Sucden expects an even smaller sugar cane crush at 575-580 million tonnes. Sucden also expects less sugar content in the cane in the new crop, projecting total sucrose to fall around 10%.

The French trader projected center-south sugar production at 36-36.5 million tonnes, saying new sugar installations that have been added in Brazil will prevent sugar output from falling as much as the sucrose.

Analysts agreed that mills in Brazil will continue to produce as much sugar as possible in the new crop, as the sweetener continues to give better financial returns than ethanol.

Datagro estimates ethanol production to fall to 29.4 billion liters versus 30.6 billion liters in the previous season.

The experts see a positive outlook for the global sugar market, with a balanced supply into 2021/22.

Sucden said India and Brazil will have to use maximum logistics capacity in coming months to guarantee balanced supplies in the markets where they dominate.