The sugar cane crop in top producer Brazil is set to benefit from wet weather that delayed the harvest, Czarnikow Group Ltd. said.
Widespread rainfall and planned delays to the crushing season during the first two months of Brazil’s sugar cane crop put production 50 million metric tons behind last year, Czarnikow said in an e-mailed statement today. The London-based group confirmed its forecast of 505 million tons of cane and said it may rise.
“Brazil is now in a better position to deliver an improved crop than it was at the start of the season,” Toby Cohen, a director at the company, said in the statement. “The extra time can only help agricultural yields and boost the final crop.”
This is the first year in a decade that acreage will be little changed, according to the statement. The industry focused on reducing the average age of cane and increasing yields, Czarnikow said.
The unseasonably wet June brought delays and only 25 percent of the total crop was expected to have been harvested as of July 1, compared with 36 percent a year ago, Cohen said.
Sugar and ethanol are made from cane. The production mix has been weighted toward sugar, with 45.6 percent of the crop in the first half of June going toward the sweetener, according to the statement. That’s the highest mix in six years.
A weak Brazilian currency means that average prices for sugar exports in the second quarter are at a record, according to the statement. The slow start to the season means shipments in the period came to 3.8 million tons, 1 million tons below last year.
Weather will be a key factor in the crushing performance in the next two quarters, Cohen said. “Though the level of weather risk is now greater, so too is the level of confidence in the quality of the cane,” Czarnikow said.
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