
Jan 9
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Lívea Coda
Crop Forecast: Sugar Center-South - 2024 01 09
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"December’s rains were disappointing throughout the entire Center-South region. Combined with higher temperatures, it induced a major drop in soil moisture in key cane-producing regions, such as the São Paulo state. This contributes to the anticipation that the upcoming season may not witness another year of excellent TCH."
Center-South Cane, Sugar, and Ethanol Production Update
Before discussing our latest figures, it is important to talk about our forecast methodology. To best estimate cane volume, we update our expectations for area growth, yields and cane quality, considering key market sources such as Unica, MAPA, and Conab as well as realized weather, NDVI measurements and historical trends.
From cane availability, we draw sugar production. First, will mills be able to crush? Precipitation might induce lost days and slow crushing down. The second step is understanding mills optimization problem: sugar or ethanol? Sugar mix is set depending on which subproduct pays more.
23/24 crop year
December’s rains were disappointing throughout the entire Center-South region. Combined with higher temperatures, it induced a major drop in soil moisture in key cane-producing regions, such as the São Paulo state. This contributes to the anticipation that the upcoming season may not witness another year of excellent TCH (tons of cane per hectare), prompting the question: to what extent could it decrease?
Before we enter 24/25, it is important to note that the lack of rains during the last month of 2023 is not only bad news for cane development but also triggers lower leftover cane, as it boosts late crushing. Therefore, instead of considering 5Mt of cana bisada, we are currently expecting the Center-South to crush all its available feedstock in 23/24, around 551.5Mt.
Image 1: Lost Days per Fortnight in CS (No. of days considering a 5mm threshold)

Source: Refinitiv, Bloomberg, hEDGEpoint
Image 2: Crop Summary

Source: hEDGEpoint
This means that with a 48.7% sugar mix, the region can produce nearly 42.2Mt of sugar, and, given the current export pace, reach a total contribution of 33Mt to the international trade flow. Note that, although Williams hasn’t shared its final recap for December, the agency's previous numbers suggest that the country has broken its own record for the month, reaching over 3.5Mt exported, also in line with SECEX.
But what about 24/25?
24/25 crop year
Image 3: Area and TCH Estimates

Source: UNICA, Conab, hEDGEpoint
Besides having no leftover cane to rely upon, considering the adverse weather seen so far and its impact on both soil moisture and NDVI (Normalized Difference Vegetation Index) for the Center-South, our model points out that TCH should decrease by nearly 6%, if weather is not entirely favorable in the coming months.
Image 4: Crop Summary
Therefore, our base case considers 80.8t/ha of THC in 24/25, which coupled with an average area expansion of 1.24%, would lead to 620Mt of cane. Given the recent investments made to the crystallization process, the region would be able to achieve 50.9% sugar mix, which would lead to, at least, 41.7Mt of sugar next season. As a result, although TCH could correct, it doesn’t mean a crop failure, on the contrary, it means the second highest result so far. Of course, there are risks. Our estimates show that there is a feasible range between 611Mt and 635Mt depending strictly on the next couple of month’s weather.

Source: hEDGEpoint
Crop Forecast - Sugar and Ethanol
Written by Lívea Coda
livea.coda@hedgepointglobal.com
livea.coda@hedgepointglobal.com
Reviewed by Natália Gandolphi
natalia.gandolphi@hedgepointglobal.com
natalia.gandolphi@hedgepointglobal.com
www.hedgepointglobal.com
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