- The extremely dry period has impacted the development of sugarcane fields – an estimated 10% drop.
- We believe there is a downward bias in our crush estimates.
- However, the higher concentration of ATR can minimize the impact on total sugar production.
Alert: Worrying Rainfall
- Until now, the year 2021 had a volume of rain with an accumulated 44% below the historical average
- For the month of June, which is already a dry month, the situation is no different:
- Rainfall is expected to be 41% below average:
To know the forecast in your region, access CS Brazil Weather Update.
- A deviation of 20% from the average is something harmful to the development of the cane field.
- Sugarcane fields have been facing adverse weather since last year.
- Therefore, the plant is more sensitive to the current drought and with an even greater chance of breakage.
Crop Updates
- Crushing at CS is strong due to the dry weather that has allowed the mills to operate with few interruptions.
- However, it is still below the 20/21 crop by 17mmt, having accumulated so far 86.3mmtc.
- Agricultural productivity in April was also lower than our expectations, at 73t/ha – 13% lower yoy.
- With that in mind, we expect sugarcane until September to have an average drop of 8%, with a downward bias.
- On the other hand, the lack of rain favors the concentration of sugar in the cane (ATR).
- The ATR in the last fortnights increased at a faster speed, reaching the same level as the previous crop.
- A higher-than-expected ATR may minimize part of the negative effects of lower agricultural productivity.
Attention Points
- Our estimated harvest is: 558mmt of cane and 35.6mmt of sugar.
- With the weather situation, we have two risks:
- Even more sharp drop in TCH, and;
- Higher concentration of ATR.
- Below we present some scenarios to reflect the impact of each risk on the final sugar production:
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