Rains distribution has been somewhat heterogeneous in CS over the past quarters;
SP state ended with rains 11% below average, and concerns over cane development remain in the region;
However, other states were able to recover, and could even see an increase in ag. yields;
Overall, CS looks it could see a similar crush to 2018/19;

Impact registered

Cane fields in MG state are looking healthier than they did in January;
Precipitation has been enough to help affected areas to recover;
The photo shows the even size of the internodes, reflecting that the cane has not suffered hydric stress during its developing phase;

MG – 3rd cut cane, to be harvested in May

On the other hand, cane seen in Rio Preto (SP) region – photo below – has shorter and uneven internodes denoting the lack of water for cane development;

SP – 2nd cut cane, to be harvested in July

Heterogeneous

Q4’18 and Q1’19 Cumulative Rains

Rains during Q4 and Q1 are essential for cane development;
However, CS registered a dry spell that lasted from December until mid-February, causing concern that ag. yields could be significantly affected;
Most regions were able to recover the volumes lost with well distributed and consistent rains, apart from SP and MS;
Since SP state is responsible for 60% of CS cane volume, worries over cane availability are not over;
Volume of rains during the season could hinder ag. yields further;
Monitoring of cane isnot over;

Conclusion: Overall, volume of rains in CS was better than initially expected. Positive for cane development in several areas, apart for the majority of SP.

No upside for cane crush, volume should be closer to the one registered in 2018/19 (569mmt).

Flowering – another concern for 2019/20?

Flowering inducing period goes from 20^th of February until the end of March;
Certain conditions have to be met during the period in order to induce flowering – which will be effectively seen in July;
Flowering affects both TCH (ag. yields) and sugar content of the cane;
When reached an advanced state, the cane dries up inside in a phenomenon called “isoporização”;

SP – 2015/16 season, when widespreadflowering was reported

Although temperatures during the period in SP did offer an environment ideal for flowering, the volume of rains did not;
Water stress reduces the likelihood of flowering;

Conclusion

Not expected to cause a significant impact for 2019/20 season.
Mills are able to manage the harvesting in order to minimize the damages

Ana Zancaner

Ana graduated from Insper University Sao Paulo in 2013, with a bachelor’s degree in business administration. She joined CZ as an intern in 2013 and is now our senior analyst in our Sao Paulo office. At CZ she is responsible mainly for analysis of the Brazilian sugar and ethanol sector but supporting other consulting requests as well.