Bloomberg News

Brazil Sugar Cane Crop to Match Last Year Because of Dry Weather

April 11, 2012

The sugar cane crop in Brazil’s Center South, the main producing region of the world’s largest grower, may match last year’s poor harvest, Ismael Perina Junior, president of sugar-cane growers association Organizacao dos Plantadores de Cana da Regiao Centro-Sul do Brasil, said today in a telephone interview.

The region may produce 500 million metric tons of cane this season compared with 494 million tons last harvest when a combination of dry weather, frost, flowering and advanced age of cane fields pared yields, Perina Junior said.

A relatively dry December, February and March will “compromise” the current harvest which began last month and runs to the end of the year, Perina Junior said. The rainy season starts in December and ends in April, he said.

“It’s going to be a complicated year for production of fuel,” he said. Average rainfall “was much lower than normal,” he said.

Brazil reduced the amount of ethanol it mixes with gasoline last year after prices of the renewable fuel soared to record levels.

Soybean growers in the region, who plant in October and harvest by March, saw production fall by a fifth this year, which indicates that cane growers may suffer similar cuts in yield, he said.

Brazil lowered the mix of anhydrous ethanol with gasoline in October to 20 percent from 25 percent, Salim Morsy, an analyst at Bloomberg New Energy Finance’s Sao Paulo office, said today in an e-mail.

The industry expected to produce as much as 540 million tons in December, he said.

Prices of anhydrous ethanol reached a record high of 2.47 reais ($1.35) a liter on April 15 last year, according to information compiled by Bloomberg.

To contact the reporter on this story: Stephan Nielsen in Sao Paulo at snielsen8@bloomberg.net

To contact the editor responsible for this story: Reed Landberg at landberg@bloomberg.net


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