Brazil’s Sugar Cane Output May Be 505 Million Tons

Sugar cane production in Brazil’s Center South, the main producing region of the world’s largest grower, may be 505 million metric tons in the 2012-13 season starting in April, according to Jenkins Sugar Group Inc.

That compares with 493.5 million tons so far in the current 2011-12 season, according to industry group Unica. Most of the harvesting has already been completed, Unica said on Feb. 14. Jenkins’ estimate is lower than the 520 million tons forecast by Macquarie Group Ltd., Olam International Ltd. and Kingsman SA and the 522 million tons estimated by Rabobank International.

“It’s a low end of what the range has been for sure,” Jeff Dobrydney, a vice president at the Wilton, Connecticut- based broker, said by phone today. “We don’t like the prospects of what was replanted year-on-year, and based on the weather, which wasn’t too dramatically different than last year, we don’t see any reason for the crop to improve significantly.”

The sugar cane crop in Brazil’s Center South fell for the first time in a decade in 2011-12 after drought, frost and flowering cut yields, according to Unica. Flowering reduces the sugar content in the raw material.

Cane replanting rates have been 10 percent to 12 percent year-on-year, below the ideal level, Dobrydney said. The crop is also getting old, and the ideal age of the plants should be 2 years to 2 1/2 years, he said.

“It’s an older crop, a crop that has not received enough investment to propel a 15 or 20 percent crop replanting, which is what you look for at this time,” he said. “The average age of the cane is probably somewhere between 3.9 and 4.5 years now and that’s certainly much too old.”

source: bloomberg