Brazil's center-south to raise cane output in 2018-2019

Brazil's center-south region should increase cane production in the next season, due to better crop care and wider renovation of cane fields, consultancy Agroconsult said on Tuesday. It said in a preliminary projection for the 2018/2019 crop year that mills could crush 625 million tonnes, compared with 590 million tonnes seen for the current crop. Sugar production is expected to rise to 35.7 million tonnes in the next season compared with 34.7 million tonnes in the current crop.
"We are seeing more investments in cane fields," Fabio Meneghin, sugar and ethanol analyst for Agroconsult, said during an industry conference. He added that agricultural yields are expected to rise around 3 tonnes per hectare next year, to 77 tonnes of cane per hectare. Agroconsult said that cane producers increased renovation, or replanting, for the next season from 9 percent of total planted area to 10 percent. Renovation leads to higher output, since old cane fields tend to yield less per hectare.
Meneghin also noted an increase on fertilizer usage, which should boost output next year. Projections consider normal weather over Brazil's summer. If the current situation of below-average rains may continue going forward, the potential for production next year could be reduced, he said. The excessively dry weather in most of Brazil during some days in August and September has helped mills to speed up processing.
As such, INTL FCStone sugar analyst Joco Paulo Botelho expects mills to end cane harvesting earlier this year, with most mills finishing crushing around November. Lucas Brunetti, an analyst at Banco Pine, has a different view for the new crop. He expects center-south cane production in 2018/19 to reach 560 million tonnes compared to his view of 590 million tonnes for the current season.
Brunetti said that despite increasing renovation, center-south cane fields are still old on average. He projected sugar output next season from the center-south at 32.9 million tonnes versus 36.5 million tonnes currently. Both Pine and Agroconsult analysts said they estimate better prices for ethanol next season based on their expectation of higher oil prices. They forecast stable sugar prices and mills tending to allocate more cane to biofuel production than to the sweetener.