Platts Kingsman foresaw the potential for the cane harvest in Brazil’s key Centre South region to set a record next season by a distance, as the analysis group cut 1m tonnes from its estimates for global sugar output deficits.
The influential analysis group raised by 20m tonnes to 620m tonnes its forecast for Centre South cane crush in 2016-17, which starts in April.
The upgrade put the harvest estimate clear of the 599.5m tonnes expected for this season, and the 597.1m-tonne high achieved in 2013-14.
And it reflected ideas of a double boost to cane production prospects next season from recent rains.
‘New crushing record’
Besides slowing harvesting this season, meaning substantial quantities – an estimated 58m tonnes – of so-called “bisada” cane left over for crushing in 2016-17, the rainfall has boosted yield prospects for the next crop too.
And with “so much cane left in the field, mills will definitely continue to maximise crushing and, weather permitting, they could establish a new crushing record for the [2016-17] season.””The rains that came in the rainy season, from October onward, and [are] continuing… helped the development of the new cane,” Kingsman said.
A drier season ahead could also boost the concentration of sugars in crop, potentially encouraging mills, which have been focusing in particular on turning their cane into ethanol, manufacturing sugar instead.
World deficit estimates reduced
In fact, Kingsman raised by 2.2m tonnes to 35.1m tonnes its forecast for Centre South sugar output next season, taking it further ahead of the 30.7m tonnes expected for 2015-16.
However, it would remain behind the record 35.5m tonnes of sugar produced in 2014-15, before changes to Brazilian taxation and gasoline prices enhanced the appeal to mills of making ethanol.
The group made the revisions as, citing the improved Brazilian production prospects, it lowered by more than 400,000 tonnes to 4.86m tonnes its estimate for world sugar production deficit in 2015-16 – on an October-to-September basis.
Kingsman also cut by nearly 600,000 tonnes to 7.21m tonnes its forecast for the world sugar output shortfall next season, although this would still represent the biggest deficit in seven years.
China, India downgrades
The improvements to Brazil production hopes were offset in part by reduced expectations for Indian output, which was downgraded for this season 900,000 tonnes to 26.6m tonnes, “mainly due to the impact of El Nino”, which left the country with below-average monsoon rains.
Still, the figure is higher than estimates from many other commentators, a factor Kingsman attributed to its expectation that elevated domestic sugar prices encouraging mills to harvest “immature” cane.
Chinese sugar output was downgraded too, to 1.92m tonnes, a drop of 294,000 tonnes year on year, reflecting weaker expectations for cane volumes.
“Local sources are telling us that cane is flowering in most cane areas of Guangxi province but also in Yunnan, an unusual phenomenon due to the warm winter.
“But cold rain and snow could cut yields as China is still in the wintertime (and this has recently happened in most of Guangxi area).”
(Source – http://www.agrimoney.com/news/kingsman-cuts-sugar-deficit-forecasts-citing-record-brazil-crush–9244.html)