Unica cuts Brazil sugar hopes - again

Unica has – again - cut its estimate for sugar output from Brazil's biggest cane region, after frost hampered the crop's ability to play catch up on last year.

The influential cane industry group reduced its estimate for sugar production in the Center South, responsible for some 90% of Brazil's total output of the sweetener, by 800,000 tonnes to 31.6m tonnes.

The downgrade by Unica, which in March had forecast Center South output at 34.6m tonnes, follows continued crop damage from weather extremes, most recently frost, which has had a particular impact on a cane crop which, thanks to low rates of replanting, is far older than is ideal.

While Center South sugar output was 1.8% higher in the second half of July than a year before, far stronger rates of growth had been expected this far into the season, with many mills, blessed with excess capacity, having delayed processing from earlier one, when yields are typically lower.

Race to the bottom

The updated figure leaves Unica more downbeat than many other observers on output in Brazil, the top sugar producing and exporting country.

Consultancy Datagro on Wednesday lowered its estimate for Center South output to 31.8m tonnes.

Last month, Kingsman, the influential Swiss-based analysis group, lowered its estimate to 31.9m tonnes.

Raw sugar for October delivery closed up 1.7% at 28.08 cents a pound in New York.

source: agrimoney