Brazilian sugar exports are expected to fall by 6.5 million tonnes in the 2018-19 crop compared with the previous season due to a smaller cane crush and falling sugar production in both the center-south and northeast regions, according to a report released on Thursday. Sugar and ethanol consultancy JOB Economia e Planejamento said it expects total sugar exports of only 21.3 million tonnes in the new crop year that started in April, compared with 27.8 million tonnes reported in the previous crop.
The major center-south region, which accounts for more than 90 percent of Brazil's cane processing, is seen exporting 20.1 million tonnes, versus 26.3 million tonnes in 2017-18. Northeast mills should export only 1.2 million tonnes, compared with 1.5 million tonnes in the previous season. "We expect that to have a positive impact on global sugar prices," said Julio Maria Borges, a director at JOB.
Other analysts are also expecting a reduction in sugar exports due to smaller production, but JOB's view is one of the most pessimistic. It sees total sugar production in Brazil at 32.8 million tonnes, down from 39.1 million tonnes last season. Ethanol production is seen growing to 29.87 billion liters versus 27.89 billion liters last season, as mills boost biofuel output at the expense of sugar.
The consultancy expects a reduction of 3.5 percent in cane area in center-south, the first time in nine years that the area decreases. Borges said the reduction is due to cost-cutting initiatives by mills. "Areas more distant to mills have not been replanted, as well as areas with smaller yields. It goes in the direction of cost reduction and higher efficiency," he said.
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