2018/2019 Sugar Margins In Brazil Hit Their Lowest Level In A Decade
Two characteristics shaped the Brazilian sugar sector’s 2018/19 (Apr) campaign. First, mills prioritized the production of ethanol over sugar, resulting in a 64:36 mix in favour of ethanol in the Center/South (CS) region, and second, the lower sugarcane supply following adverse weather conditions, hit crushing in most growing regions.
The decline can be attributed to the drought that affected the main growing regions at the beginning of the
2018/19 cycle. It brought about 120 days without rainfall in some areas,especially São José do Rio Preto, São Carlos and Ribeirão Preto – all located in São Paulo state. Thus, below-average rainfall at the beginning of the 2018/19 crop harmed the accumulation of biomass, reducing the average cane yield to 73.50 tonnes per ha from 76.40 tonnes in 2017/18.
The sugar market players in Brazil are divided about the size of the 2018-19 cane crop in the center-south, the world’s largest sugar producing region, as sugar futures are just about to hit two-month lows and erratic weather makes it difficult to assess the season’s likely final tally. Click below to get an overview of the production costs of the Brazilian sugar industry and its perspectives.