Sao Paulo: Brazil’s upcoming sugarcane crop would be only slightly smaller than the previous record, according to the government agency Conab.
Despite lower agricultural yields, sugar production is anticipated to reach an all-time high, thanks to increased planting that offsets the yield decline.
Conab predicts that Brazil’s total sugarcane crop for the 2024/25 season (April-March) will be 685.86 million metric tons, which is 3.8% less than the previous season. The decrease in total cane volume is less than the anticipated 7.6% decline in agricultural yields due to below-average rainfall and excessive heat. This is due to a 4.1% increase in planted area, reaching 8.67 million hectares.
“Some were surprised by Conab’s increase in planted area, as other sources like the USDA expect a much smaller expansion,” said a U.S.-based sugar trader.
The USDA projected a larger decline of 8.5% for Brazil’s sugarcane crop, estimating a planted area increase of only 1.3%. Following Conab’s report, sugar prices in New York fell by as much as 3%.
Conab forecasts sugar output in Brazil to reach a record 46.29 million tons in the new season, a 1.3% increase from the previous cycle, which was also a record. Ethanol production, both sugar and corn-based, is expected to decrease by 4% to 34.18 billion litres. The decrease is primarily attributed to mills allocating more cane to sugar and less to ethanol. However, corn-based ethanol production is projected to grow by 16%.
