SAO PAULO: Brazil's center-south region will produce 29.5 million tonnes of sugar in the 2019/20 season, up 11 percent over the previous crop but less than projected previously, broker and analyst INTL FCStone said in a report on Thursday.
FCStone had projected in January sugar production of 30.2 million tonnes in the new season that starts officially in April, although some mills are already harvesting. In the previous season, the region produced 570 million tonnes.
Mills will tend to increase the amount of cane earmarked for sugar production and cut ethanol production in the new crop, but not by much, INTL FCStone said.
FCStone sees ethanol output in the new crop falling to 27.6 billion liters from 30 billion liters last season. In January, the broker had projected the biofuel's output in the new season at 26.8 billion liters.
It said that since January market conditions changed slightly in favor of ethanol and against sugar production. Oil prices rose further, as did gasoline prices in Brazil, making room for higher demand for ethanol at prices that gives mills larger returns when compared to those of raw sugar exports.
As a result, the broker sees companies now earmarking 39.7 percent of available cane to sugar production compared with 41 percent seen in January and 35.3 percent in the previous season, an all-time low.
Brazil's 2019/20 center-south cane crop is seen at 568.6 million tonnes, up from the 564.7 million tonnes seen in January, as above-average rains in February and March improved prospects for the crop, which is still expected to be a bit smaller than the previous season that should reach 570 million tonnes.
The global sugar supply balance in 2018/19 is seen at a deficit of 300,000 tonnes versus a surplus of more than 8 million tonnes in the previous crop year.
Comments
Comments are closed for this article.