Bloomberg News

Kingsman Reduces Brazil Area’s Sugar Cane Crop Estimate by 2%

July 02, 2012

The sugar cane crop in Brazil’s center south, the main growing region of the world’s biggest producer, will be 2 percent smaller than a previous estimate, according to broker and researcher Kingsman SA.

Growers there will harvest 500 million metric tons of cane in the 2012-13 season under way, down from an April forecast of 510 million tons, the Lausanne, Switzerland-based company said in its third estimate for the crop. Output in the region was 493.3 million tons in 2011-12, industry group Unica said.

“The wet weather has taken its toll on the cane and it will take at least a month for it to dry out and to start building sucrose,” Jonathan Kingsman, managing director of Kingsman, said in a report e-mailed today. “We will by then have lost three months of crushing poor quality cane, and it will take exceptional sucrose content at the end of the season to boost the harvest average.”

Sugars in the cane, known as sucrose, was cut to 137.5 kilograms a ton from 139 kilograms a ton, according to Kingsman. That will result in sugar production at 31.8 million tons, 1 million tons smaller than previously estimated, data from the researcher showed. Ethanol output will total 20.8 billion liters (5.49 billion gallons), down from an April forecast of 21.4 billion liters, it said.

“This harvest is lagging behind and will need either exceptionally rain‐free weather in July and August or relatively rain-free conditions through to January,” Kingsman said.

Center South

Sugar output in Brazil’s center south declined 32 percent to 1.37 million tons in the first half of June as rainfall hindered harvesting, Unica said on June 26. Dry weather has returned to the region and a “pick up” in shipments is expected in July, Kingsman said.

“It is probably safe to say that this reduced crop number will not affect nearby availabilities,” the company said. “Rather it will reduce availability at the end of the crop year. In our own trade flow estimates it will show up as one million tons less availability in the first quarter of 2013.”

The sugar cane crop projection may be revised lower if El Nino weather conditions, a warming of the waters of the Pacific Ocean, bring more wet weather to Brazil’s center south, Kingsman said. The current estimate assumes cane crushing will take place through January, it said.

To contact the reporter on this story: Isis Almeida in London at Ialmeida3@bloomberg.net

To contact the editor responsible for this story: Claudia Carpenter at Ccarpenter2@bloomberg.net.


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