by Roberto Machel
SAO PAULO (Reuters) – Agricultural productivity of sugarcane in south-central Brazil, the country’s main sugar and ethanol producing region, is expected to increase by 8.5% in the 2022/23 cycle compared to current season, but the area may fall by around 2%, depending on the renewal of sugarcane fields and competition from land with grains, assessed this Thursday by Unica, an association that represents the sector.
If this is confirmed, the supply of sugarcane in the center-south, the largest producing region in the world, could increase to something close to 560 million tons in 2022/23 (April/March) after the weak harvest of 2021/22, evaluated the technical director of the Sugarcane Industry Association (Unica), Antonio de Padua Rodrigues, noting that any number at this time is premature.
The level of 560 million tons would represent a growth of more than 6% compared to 2021/22, the crop that had the lowest productivity in the series started in 2003/2004, with an estimated 67 tons per hectare, compared to 78 tons in the previous cycle – this reduction it occurs mainly by prolonged drought and frost.
“Too premature to define a number, there will be a recovery in agricultural productivity, we have to wait for satellite images that we will probably have in March, and see whether or not there will be an increase in sugarcane reform in the period from January to March,” he told reporters .
In addition to the higher rate of sugarcane reform, which may impact the harvested area, some information indicates area competition between sugarcane and grains, such as soybeans and corn.
He pointed out that national figures already point to a reduction of around 2% in the area planted with sugarcane this year, something that could be repeated in 2022.
“The expectation is that there may be a further reduction in the harvesting area close to the level of 2%. If there is an 8.5% increase in productivity and a 2% reduction in the harvesting area, there will be an increase in the sugarcane supply of around 6%. If you imagine 525 (million tons of the current crop) and add 6% more, we are talking about 30 million more (tonnes)”, said Padua.
“So the number will be close to 560 million tons.”
He highlighted that adverse weather conditions, including drought, should still leave sugarcane productivity in the center-south well below the potential of 85 tons per hectare.
The executive added that the increase in sugarcane supply in 2022/23 should result in growth in the same proportion as sugar and ethanol production, since the market scenario for both products is favorable.
Padua commented that sugar prices next year will not be lower than this year, considering the pace of advance sales fixations in Brazil.
“The trend is for us to have good prices for 2022/23,” he said.
2021/22
Unica estimated the final crushing of sugarcane in 2021/22 at 525 million tons, a drop of 13.3% compared to the previous season, which was above 605 million tons – in the harvest until December 1st, crushing totaled 520 .9 million tons.
Sugar production in the center-south should end the 21/22 season with a drop of 16.7%, to 32 million tons, while ethanol production (including corn biofuel) should close the cycle with a drop of 8, 7% to 27.7 billion liters.
In addition to climate issues, the numbers consider a cane “mix” for sugar production of 44.87%, compared to 46.07% in the previous season, while the total raw material destined for ethanol increased to 55.13% in 2021/22, compared to 53.93% in 2020/21.
Ethanol production has not dropped further because the production of biofuel from corn should advance 36% compared to the previous harvest, to 3.5 billion liters.
SALES
Sugar exports from Brazil registered a drop of 8.8% in volume from January to November, to 25.3 million tons, pointed out Unica, considering that, with better prices, revenue increased 7%, to 8.43 billion of dollars.
The main destinations were China, with 15.9% of participation, followed by Algeria (8.4%), Bangladesh (6.8%), Nigeria (6.7%) and Malaysia (5.2%), while other destinations took 57% of shipments.
The volume of sugar sold also fell in the Brazilian market, recording a 4.5% decline from January to November, compared to the same period last year.
According to Padua, the market is seeing looser ethanol stocks, while hydrated biofuel has lost market share to gasoline, which also explains the drop in prices at the plant.
He also said that the price of ethanol at the plant has also fallen due to a reduction in the consumption of fuels from the Otto cycle in October and November, as a sign of the economic slowdown.
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