Datagro reduces estimate on sugar milling and production in the Center-South region for the 24-25 harvest

The unprecedented increase in fire cases, many of them of criminal origin, in the Center-South region of Brazil at the end of August raised greater concerns about the conditions of sugarcane fields, already severely impacted by the prolonged drought, to be harvested during the last third of the 24/25 harvest.

Although the impacts of the fires are still being measured, especially in terms of losses, the extent of the affected area already indicates a challenging environment for harvesting operations, especially given the need for mills to grind the burnt sugarcane within a period of up to 48 hours to avoid significant loss of quality, without forgetting the areas where sugarcane has not yet reached its ideal cutting point.

In light of the initial results of these impacts, in addition to the damage already caused by the drought, Datagro published a revised 24/25 crop balance for the Center-South region of Brazil on August 26 for Datagro Crop Survey clients, the new figures for which can be summarized in the following points:

• Sugar cane: reduction from 602,0 to 593,0 million tons (654,43 million tons in 23/24);
• Industrial yield: reduction from 140,60 to 140,20 kg of ATR per ton of sugarcane (139,22 kg ATR/tc in 23/24);
• Sugar production: reduction from 40,025 to 39,30 million tons (42,43 million tons in 23/24);
• Total ethanol production: reduction of 0,44 billion liters due to the effects on the sugarcane harvest (in the 23/24 harvest, 33,59 billion liters were produced);
• Production mix for sugar: maintained at 49,6%, against 48,9% in the 23/24 harvest.

Monitoring of the impact of the fires and the general condition of the sugarcane fields in the 24/25 harvest and the outlook for 25/26 continues to be monitored, and any refinements to estimates may be made in the future.

More than in relation to milling, there is greater concern about the crystallization power of the mills in the Center-South, with many market agents already suspicious of the possibility that the mix for sugar production in 24/25 will be close to that of 23/24, depending on the damage to the sugarcane fields caused by the fires and the speed at which the mills were able to harvest these areas in a timely manner – in addition to the impacts on the plant, the strong milling pace tends to limit the flexibility of the mills to maximize sugar production.

On the other hand, it is important to highlight the revision of corn ethanol production, from 7,7 to 8,0 billion liters in 24/25, corresponding, therefore, to 24,6% of the total ethanol supply in the region for the current season, against 18,7% in 23/24, which helps to offset the drop in sugarcane ethanol production. The new estimate for total ethanol production in the 24/25 harvest in the Center-South region goes from 32,66 to 32,52 billion liters.

The fires have also raised concerns about areas to be harvested in the upcoming 25/26 crop, given the damage already observed by the Datagro Crop Survey agronomists team in regrowth areas, which should encourage producers to delay the start of milling operations next season.