Booming international prices and a weakening currency led Brazilian mills to increase sugar production by 32 percent in the 2020-2021 harvest, making the country the world’s biggest producer for the second year in a row. Now, as more and more cane becomes sugar, and the dry weather speeds up the harvest, the country risks reducing the safety margin for ethanol production in 2021, according to experts.
Data from sugar mills association Unica shows that sugarcane crushing reached 415.1 million tonnes by the end of August — 3.8 percent more than the same period in 2019-2020, despite a slowdown in the second half of the month caused by rains in São Paulo state.
According to Bruno Lima, sugar and ethanol analyst at consultancy StoneX, the increasing appetite for Brazilian sugar exports and the dry weather are encouraging producers to move forward with a final push before the end of the harvest in October. As a result, there will be less surplus sugarcane — cana bis, as it is known in Brazil — in the fields to support an early start of the 2021-2022 crushing season in March.
“When crushing speeds are high, you have less leftover sugarcane for the next harvest. Our estimates are that ethanol stocks will reach 1.5 billion liters by late March, compared to 1.9 billion liters in the previous season. We may have a price peak at this time,” Mr....
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