Copersucar lowered its forecasts for the Brazilian cane harvest to 580 million tonnes from 595 million tonnes due to frost and higher rainfall. However, sugar production figures were raised to 33.5 million tonnes from earlier estimates of 32 million tonnes due to a greater switch from ethanol production to sugar as a result of the depressed Brazilian currency. Copersucar added that returns from sugar production and exports were 10% to 15% higher compared with anhydrous ethanol production.
Unica’s forecast for sugar production is 35.5 million tonnes while Canaplan’s latest forecast is 34.5 million tonnes. So Copersucar may have undershot in its earlier estimates. Final figures for sugar production in Brazil look likely to be around 34 million tonnes which is a tad lower than last year’s 34.1 million tonnes.
Ethanol demand in Brazil may see sugar cane diverted to ethanol production rather than sugar thereby dashing hopes of the possibility of higher sugar production to ease supply. It is expected that some growers may increase the size of their crops to take advantage of higher sugar prices which in turn may see prices fall later in the year as supply concerns ease.
Despite a larger sugar cane crop expected in 2011/12 sugar production is unlikely to be significantly increased or changed due to the diversion of cane to ethanol production. Rising domestic ethanol demand in Brazil is likely to continue into next year.
Brazil’s sugar production figures, rising domestic Brazilian ethanol demand, India’s OGL sugar exports now looking unlikely, EU out of quota imports and the impacts of cyclone Yasi on Australian production may provide sugar prices with support as concerns grow concerning supply tightness.
Posted in Ethanol, Sugar
Tagged brazilian ethanol demand, brazilian sugar, cyclone Yasi, ethanol, indian sugar, open general licence, sugar cane, sugar supply, sugarcane, white sugar