CNA analyzes production costs in the sugarcane chain

The Brazilian Agriculture and Livestock Confederation (CNA) promoted, on Wednesday (26/10), another live broadcast of the Campo Futuro Project Results Circuit to publicize sugarcane production costs.

According to CNA's technical advisor, Eduarda Lee, in 2022, the project raised the costs of activity in Araraquara, Assis, Jaboticabal and Penápolis, in the state of São Paulo; Cianorte, Jacarezinho and Cambará, in Paraná; Goiatuba and Quirinópolis in Goiás; João Pessoa (PB); Maceió (AL); Recife (PE) and Uberaba (MG).

The Pecege ESALQ/USP project manager, Haroldo Torres, participated in the live and presented the main results of the panels in the Center-South and Northeast regions. According to him, the lower-than-expected recovery in agricultural productivity, coupled with a revenue outlook similar to the previous harvest, characterized a reduction in margin and profit obtained in 2022.

“This situation highlights the need for effective productivity gains in the sector, even if the profitability conditions themselves prove to be limiting investments in the field”, highlighted Haroldo.

Torres said that the Effective Operating Cost (COE) of sugarcane produced in the Center-South registered an increase of 46% in relation to the last survey of the project. “On the one hand we had an increase in rentals due to the need to charge higher values ​​to compete with other crops, and on the other hand an increase in the price of inputs, especially fertilizers and agricultural pesticides”.

During the live, the project manager reported that, in the Center-South, spending on fertilizers represented around 56% of the cost of inputs in the sugarcane production process. In the Northeast region, expenditure on fertilizers was equivalent to 62%.

StoneX's Head of Sugar and Ethanol, Bruno Lima, spoke about the current sugarcane scenario and the prospects for the next cycle. For him, the 2022/2023 harvest was challenging, despite being balanced due to prices. “The current sugar market remains close to historic highs. But as we move towards the advancement of the global sugarcane cycle, the future scenario shows greater pressure on prices”.

Bruno explained that the physical market is the main support for sugar prices and that it is already possible to see an increase in supply globally. “The global balance indicates an increase in supply above demand, as most of the main players are recovering production.”

Lima also cited StoneX's prospects for the next Brazilian sugarcane harvest, which should reach 583,1 million tons, an increase of 4,6% compared to the 2022/2023 harvest, which should total 557,5 million tons. “Sugar is more in focus than ethanol and in our view it will remain that way.”

The entity's representative also highlighted the main factors that could influence the drop in international sugar prices in the coming months, such as the prospect of a greater global surplus; the increase in the stock/use ratio and ethanol with a limit on price increases.