French food and energy company Tereos invested in recent months to increase its sugar production in Brazil in the new season that starts in April, although it sees a fall in the overall sugarcane crop in the country's Centre-South (CS) area.
Tereos said it plans to make 2 million metric tonnes of sugar in Brazil in 2024/25 versus 1.9 million tonnes in 2023/24, as it will increase to 70% from 67% its total cane allocation for sugar production, according to the head of the Brazil unit, Pierre Santoul.
Most sugarcane mills in Brazil have a certain flexibility to allocate cane for sugar or ethanol production, depending on prices. Tereos has usually had a higher sugar mix, as its sugar business is larger than its ethanol operations.
The company is looking to have a similar crushing volume in the new season, thanks to cane that was left in the fields last year and will be crushed at the start of the new season.
"We are looking at a stable crushing. We could not crush all the cane last year, so we have a cushion on cane supply that will allow the company to keep volumes," Santoul said.
Sugarcane Crop Outlook
The company, however, sees the overall sugarcane crop below 600 million tonnes in Brazil's CS in 2024/25 versus 660 million tonnes in 2023/24 due to insufficient rains. The view is in the lower side of a range of projections for the new crop that goes from 580 to 650 million tonnes.
If a smaller crop is confirmed in Brazil, Santoul believes ICE raw sugar prices SBc1 could rise slightly to between 24 or 25 cents per pound. The product was trading close to 23 cents on Monday.
Brazil has been the main supplier of sugar to the world, with close to 50% of the global trade of the sweetener, as the El Nino climate pattern hit production in Asia, leaving traditional sugar exporters such as India out of the export market.
