The Brazilian Sugarcane Industry Association (UNICA), in cooperation with the Center for Sugarcane Technology (CTC) and other sugar and ethanol producer associations in South-Central Brazil, announced its estimate for the 2012/2013 sugarcane harvest. The forecast calls for 509 million tons, up 3.19% compared to the total amount of sugarcane processed in the previous harvest, which totalled 493.26 million tons.

Data collected by UNICA, together with satellite image mapping of the South-Central region obtained from the National Institute for Space Research (CANASAT-INPE), indicates an expansion of 3% in the total area planted with sugarcane and available for the 2012/2013 harvest. The expansion will take place particularly in the states of Mato Grosso do Sul, Góias and Minas Gerais.

Expanding the planted area should be the determining factor behind the projected increase in the total amount of cane that should be available for processing, because there is no expectation of significant gains in agricultural productivity in the next harvest.

The estimated agricultural productivity in the 2012/2013 harvest considers factors such as crop flowering, a phenomenon that happens under specific circumstances and was a factor in productivity losses in the 2011/2012 harvest. The probability of frosts in some regions, the rate of incidence of pests and diseases, the extent of crop renewal, characteristics of sugarcane plantations, further advances in harvest mechanization as well as weather conditions observed and forecast for producing areas are also important aspects to consider.

According to UNICA’s Technical Director, Antonio de Padua Rodrigues, a visual analysis of cane fields in Brazil’s most important growing region returned generally positive results, although severe drought conditions in February and March severely impacted crop development in some areas: “With the information available at this point, it is not possible to forecast a significant increase in agricultural productivity and for this reason, we are working with 68.7 tons of sugarcane per hectare, the same figure observed last year.”

Quality of Raw Material

The projection for total recoverable sugars (ATR) per ton of harvested cane indicate an increase of 1.79% over the amount observed in the previous harvest. UNICA expects that to increase the amount of ATR to 137.53 Kg per ton in 2011/2012 to 140 Kg per ton in the 2012/2013 harvest.

The expected increase in sugar content is justified mainly by the forecast of a shorter harvest, which means harvesting will be more intense during the most favourable period for the crop to reach maturity. Weather conditions during key months are also not expected to lead to crop flowering in major cane producing areas. Flowering occurred in several regions last year, interfering with the concentration of sugars because the plant wastes energy in the formation of the flower. When this happens, the end result is a loss in sucrose, the key ingredient for the production of ethanol and sugar.

In terms of total production, the 2012/2013 harvest is projected to reach 71.26 million tons of ATR, up 5.04% over the previous year, when production totalled 67.84 million tons. The projected higher ATR total is based on the increase in raw material to be processed, as well as higher amounts of sugar content expected in the cane to be harvested.

New producing units

UNICA is projecting that only two new mils will launch activities during the 2011/2012 harvest in South-Central Brazil. That number is significantly lower than in recent years, a consequence of slower expansion in the sugarcane industry since the global credit crisis in 2008 and 2009. There were 25 new mills in 2007/2008; 30 in 2008/2009; 19 in 2009/2010; 10 in 2010/2011 and only 3 new units launched in the last harvest.

The two mills expected for 2012/2013 will be located in the state of Mato Grosso do Sul.

Sugar and Ethanol Production

Of the total projected sugarcane crush for the 2012/2013 harvest, UNICA estimates that 48.75% will be directed to the production of sugar, a percentage very close to the 48.43% observed in the 2011/2012 harvest. As has been the case for several consecutive harvests, most of the sugarcane in the 2012/2013 season (51.25%) will be used for ethanol production.

Sugar production is forecast to reach 33.10 million tons, 5.72% higher than the 31.31 million tons produced in the 2011/2012 harvest. Ethanol production should reach 21.49 billion liters, a 4.58% increase compared to the last harvest, when the total reached 20.55 billion liters.

Of the 21.49 billion liters of ethanol expected in the new season, 14.54 billion will be hydrous ethanol, an 11.14% increase over the 13.08 billion liters produced in the 2011/2012 harvest. The remaining 6.95 billion liters will be anhydrous ethanol, a total that’s 6.91% lower than in the previous harvest.

UNICA is projecting a drop in anhydrous ethanol production because during six months of the 2011/2012 harvest, Brazil’s mandatory ethanol blend with gasoline remained at the 25% level, 5% above the 20% blend currently in place. It should be noted that the projected production for each type of ethanol in the new harvest was calculated considering the current blend rate. Should the percentage required by the government change during the harvest, hydrous and anhydrous ethanol volumes will also be revised by UNICA.

UNICA Technical Director Antonio de Padua Rodrigues sees no problem in hiking anhydrous ethanol production to comply with a higher blending rate, should the government decide to make that adjustment. “There is new legislation in place under the guidance of the National Petroleum, Natural Gas and Biofuels Agency (ANP in Portuguese) which has been followed correctly, providing the market with added certainty about the supply of anhydrous ethanol, particularly during the inter-harvest period when there is no production and stockpiles must take us to the beginning of the following harvest,” he added.

Sugar and ethanol market

Brazilian sugar exports in the 2012/2013 harvest are projected to reach 24 million tons, 8.5% higher than the total exported by the South-Central region in the 2011/2012 harvest.

Contrary to what happens with the sugar market, ethanol exports will likely suffer a significant drop, expected to reach 8.11%. That would bring the exported total down to 1.70 billion liters, compared to 1.85 billion liters in the 2011/2012 harvest. The amount of exported anhydrous ethanol is expected to increase, while hydrous ethanol exports will decrease.

According to Rodrigues, current estimates indicate that the Brazilian fleet of flex-fuel automobiles and motorcycles will increase by 7% during the 2012/2013 harvest, an expansion rate that’s slightly below the projected increase in production o hydrous ethanol. “This means we are likely to observe a slight increase in the consumption of hydrous ethanol by flex-fuel vehicles during the next harvest,” he concluded.

Estimate for 2012/2013 Sugarcane harvest of Brazilian South-Central Region.

ABOUT HARVEST DATA:
 
The data released in this harvest update was compiled and analyzed by UNICA, with figures provided by the following syndicates and associations of producers from the South-Central states:

ALCOPAR - Association of Producers of Ethanol and Sugar in the State of Paraná
BIOSUL - Association of Bioenergy Producers of Mato Grosso do Sul
SIAMIG - Syndicate of Ethanol Manufacturing Industry in the State of Minas Gerais
SIFAEG - Syndicate of Ethanol Producers of the State of Goiás
SINDAAF - Fluminense Syndicate of Sugar and Ethanol Producers
SINDALCOOL - Syndicate of Sugar and Ethanol Industry of Mato Grosso
SUDES - Society of Plants and Distilleries of the State of Espirito Santo