Sugarcane production is expected to grow 4,4% in the 2023/24 harvest

Sugarcane production in the 2023/24 harvest is expected to grow by 4,4% in relation to the 2022/23 cycle, being estimated at 637,1 million tons. The increase is influenced both by better crop yields and by the larger area allocated to the cultivation of the crop, as shown in the 1st Sugarcane Survey released this Wednesday (26/04) by the National Supply Company (Conab). For area, the state-owned company expects 8,4 million hectares of sugarcane to be allocated for harvesting, with an average yield of 75.751 kilos per hectare.

“The greater growth in area is justified by the increase in expansion areas and the incorporation of supplier areas, which were not used for the sugar-energy sector, which directly impacts productivity, since the first cuts have a higher yield. Furthermore, the weather conditions for this harvest have been even better than in the 2022/23 harvest”, highlights the Company's Harvest Monitoring Manager, Fabiano Vasconcellos.

In the Southeast, the main producing region, the volume harvested is expected to increase by 4,4%, when compared to the 2022/23 harvest, reaching 404,71 million tons. Highlights include São Paulo, where crops tend to show an improvement in productivity of 2,9%, and Minas Gerais, a state in which not only an improvement in field yield is expected, but also an expansion in the area allocated for cultivation. In the Center-West, the second region that produces the most sugar cane, sugarcane production is estimated at 140,9 million tons, with an increase in area and productivity in this cycle.

The expectation of an improvement in crop yields and a larger area in the North of the country also influences the increase in production by 6,4% in the region, when compared to the 2022/23 harvest, resulting in a harvest of 4,07 million tons of sugarcane -of sugar. In the South, the region is expected to produce 31,7 million tons of sugarcane. The increase is influenced by the 2,8% greater area for cultivation when compared to the previous cycle, an increase recorded after successive reductions. In the Northeast region, the harvest should remain close to stability, being projected at 55,7 million tons.

Products

According to the Conab survey, sugar manufacturing is expected to reach 38,77 million tons, being the second largest ever recorded in the historical series, second only to the 2020/21 season when it was estimated at 41,25 million tons. tons. In addition to the larger harvest expected for the raw material in the current harvest, the favorable market for the sweetener influences the greater destination of sugarcane.

Even so, ethanol production is also expected to grow 5,9% when compared to the previous cycle, reaching 33,17 billion liters. Of this total, 14,26 billion liters will be anhydrous ethanol and 18,91 billion liters of hydrated ethanol. The increase is driven mainly by the manufacture of biofuel produced from corn, estimated at 5,64 billion liters – an increase of 42%. Ethanol from sugarcane is expected to register a slight increase of 0,6%, estimated at 27,53 billion liters.

Market

Regarding the external market, there is an optimistic prospect of new gains from exports of sugarcane products in the 2023/24 harvest. These good prospects are not just related to the estimated increase in crop production. For sugar, prices on the foreign market registered an increase of 5% compared to the previous cycle, and in a movement of positive readjustments since mid-2020, a scenario influenced by restricted global supply. Another important factor that impacts the prices of both sugar and ethanol is the behavior of oil prices, influenced by the war between Russia and Ukraine.