Ask the Analyst: When Will CS Brazil Start its Huge Cane Crush?

Insight Focus

• Dry weather in H2 March could allow the cane harvest to start in CS Brazil.
• Up to 25% of mills may be crushing by the end of the month.
• This would be the most in 3 seasons.

Weather throughout Q1’23 in Centre South (CS) Brazil has been excellent for cane development. Rains during this period are crucial to ensure a healthy cane field, which is reflected in higher agriculture yields – read, cane availability.

CS Brazil mills are optimistic for cane availability this season, with some opting to start the season earlier (most in 2H March ) to avoid the risk of not be able to crush when weather becomes wetter from October onwards.

The backwardation in the raw sugar futures curve also probably helps, making early-season sugar more valuable.

How Much of a Strong Start?

UNICA (Brazilian Sugarcane Industry and Bioenergy Association) in its latest report has disclosed that in 1H March, around 18 mills expected to start the season – the highest percentage since 2020/21.

You can follow the daily forecast for the CS Brazil cane regions on Czapp 

Today’s weather forecast shows favourable conditions for an early start. Only light showers are expected in 2H March, resulting in a maximum of 1 day lost due to rains – versus an average of 2.5 for the period.

Why it Matters?

Given today’s tight sugar availability, the earlier CS Brazil starts the earlier there is fresh sugar supply.

Depending on how many mills start crushing and favourable weather, total sugar production could reach around 200kmt in Q1.

Looking at output pace, in 2H March each day lost due to rains results in around 13k tonnes less sugar output.