Brazil"s center-south cane output to grow in 2016/17 on good weather

06/11/2015 - Reuters

SAO PAULO - Brazil"s 2016/17 center-south cane crop is expected to grow as much as 5 percent compared with the current season after widespread rains favored plant development, consultancy Agroconsult said on Friday.
Brazil"s 2016/17 CS cane crop should reach a volume between 615 million and 630 million tons, compared with the current crush seen at 600 million tons.

Sugar production in the new crop should reach between 32.9 million and 33.7 million tons, versus 32 million tons expected this season.

"Current cane development has been the best we have seen since 2010, favored by ample humidity," said Fabio Meneghin, Agroconsult"s sugar and ethanol analyst, on a presentation to journalists.

This is the first projection for the new center-south crop from an independent consultancy, confirming expectations that the El Nino phenomenon, which usually increases rains over center-south Brazil, would boost cane crop prospects.

Agroconsult sees total ethanol production growing to a range between 27.8 billion and 28.5 billion liters, compared with 26.8 billion this year.

Meneghin believes Brazil center-south mills will not have a production mix so heavily in favor of ethanol next year since market conditions have changed after the recent rise in internationalsugar prices.

Agroconsult sees margins on sugar sales improving from an average of 17 percent this year to 20 percent in the 2016/17 crop, while returns for ethanol should fall from 17 percent to 14 percent.

Brazil"s center-south mills are in the final stages of the 2015/16 crop, which usually runs from April to December.

Above-average rains have delayed operations and mills will not be able to process all available cane in the fields.

Agroconsult estimates the center-south has a little over 620 million tons of mature cane in the fields, but sees total crush reaching only 600 million tons up to the end of March.

Some mills will keep operating after December if the weather allows for harvesting.

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