Persistent dryness in Brazil’s center south, the main sugar-growing region of the biggest producer, will delay this year’s harvest as producers leave cane in the fields longer to grow, according to Copersucar SA.
The start of the season, which usually takes place in April, will be delayed by about two weeks, Luis Roberto Pogetti, chairman of the Sao Paulo-based producers cooperative, which has 47 associate mills, said today in an interview at the Kingsman sugar conference in Dubai. Rainfall in cane-growing areas of southeast Brazil was below the historical average in January and similar conditions are expected this month, according to weather forecaster Somar Meteorologia.
“The harvest will start later because people will wait a while for the cane to grow,” Paulo Roberto de Souza, chief executive officer at Copersucar, said in the interview. “The next 10 to 20 days will be crucial in determining the amount of cane that will actually be available for the harvest.” While earlier forecasts were for a crop that exceeds the region’s processing potential, dry weather now means that crushing will be about the same as capacity, according to Copersucar. Processing in the center south will probably be unchanged at 595 million tons in 2014-15, with a bias to the downside, Pogetti said.
Brazil’s southeast got 75 millimeters (3 inches) of rain in January, estimates Somar. That compares with a historical average of 275 millimeters. Precipitation in February will probably be less than half of the long-term amounts, Celso Oliveira, a meteorologist at Sao Paulo-based Somar, said on Feb. 5. Similar weather conditions in the 1999-2000 season resulted in crop loses of 23 percent, according to Copersucar.
Idle Capacity
“If rains return next week, while the excess cane is already lost, we will still be able to crush the full capacity,” de Souza said. “If in the next 15 to 20 days, rains don’t return, then we start to have idle capacity. We may have five, ten, 20 million tons of idle capacity.”
Dry weather this year is also likely to have a negative impact on next year’s crop as growers can’t plant at the moment, de Souza said. Cane plants that were cut late in the season last year won’t have received enough water to regrow and be harvested again this year. A potential El Nino weather pattern, which could bring rainfall to Brazil at the start of the season, would also add to delays to the crop and reduce the time available for processing, according to de Souza.
Copersucar is rebuilding its terminal at the port of Santos, Brazil’s biggest, after it caught fire on Oct. 18, sending sugar prices traded in New York to a one-year high. In January, the company shipped 100,000 tons of sugar from the facilities, with another 250,000 set to be loaded onto ships in February and the same amount in March, de Souza said. Loadings are forecast to reach 400,000 tons in April, half of monthly capacity.
Source - http://www.businessweek.com/
