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Monday, October 2, 2023

Brazil mills seen ending sugar season

SAO PAULO: Most mills in Brazil’s main centre-south sugarcane region are ending cane crushing for the season, leaving millions of tonnes of cane in the fields to be harvested next year, as rains make harvesting operations difficult and inefficient.

Analysts and brokers believe the Brazilian sugar season has basically ended despite previous expectation that mills would go on for longer into December to try to crush available cane and profit from high benchmark sugar prices.

“With all the rains we’ve seen, it is likely that many mills end operations, despite having cane in the fields,” said Plinio Nastari, chief analyst at Datagro consultancy.

Brazil’s sugar industry group Unica was expecting that more than 70 plants in the region would still be operating in December to crush available cane, after a late start to the season back in April, but that now seems unlikely.

“It has been raining in centre-south and that will make it difficult for those mills. Some could just decide to close down for the season,” said a US-based sugar trader.

According to Refinitiv’s Eikon Agriculture Weather Dashboard, it will rain everyday in the top sugarcane region of Ribeirao Preto in Brasil until at least Dec. 19.

Nastari says that some 8 or 9 million tonnes of cane could be processed only in March in an early start to the new season in 2023. That volume could mean around 800,000 tonnes of sugar.

The problems in Brazil add to difficulties in the Indian sugar season, also due to rains, leading to a tight sugar availability for the moment.

Premiums for Brazilian sugar at the Paranagua port, the 2nd most important for shipments in Brazil, hit 100 points over futures this week, according to Datagro data, one of the highest differentials on record, as traders turned to Brazil to compensate for delays in getting Indian sugar.

Brazil mills seen ending sugar season

Source: Brecorder

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