Sugar production in Brazil is expected to increase in the 2023/2024 harvest due to a number of factors, including high international market prices and rising demand. This is good news forsugar mills, which have been investing in irrigation systems, such as drip irrigation, to improve productivity and stabilize yields.
The sugar market is currently under some financial pressure, with oil prices down and the dollar up against the real.However, the long-term outlook for sugar is positive, and Brazilian sugar mills are well-positioned to benefit from high international market prices and rising demand.
Raízen, the largest company in the sugar and ethanol sector in Brazil, increased sugarcane crushing to around 37.5 million tons in the second quarter of the 2023/24 season, compared to 26.8 million in the immediately previous period.
The company’s operational preview for the second quarter of the 2023/24 harvest showed a significant improvement over the first quarter, with growth of almost 40%. This was driven by a number of factors, including greater sugarcane availability, favorable weather, an accelerated production pace, and more crushing days.
Their total recoverable sugar (ATR) also increased during the quarter, to 143 kilos per ton of cane, compared to 124 kg/ton in the previous harvest. This led to a corresponding increase in equivalent sugar production, which reached 5.2 million to 5.3 million tons.
Given the current price cycle, the company chose to prioritize sugar production over ethanol production, which resulted in a mix that was more heavily weighted towards sugar.
Ethanol sales also increased during the quarter, by 30.6%, to a total of 1.4 million cubic meters. This is in line with the world’s leader inventory positioning strategy, given the current market conditions.
Overall, their operational preview for the second quarter of the 2023/24 harvest was very positive, with strong growth in both sugar and ethanol production. The company is well-positioned to capitalize on the current market conditions, and is expected to continue to deliver strong results in the coming quarters.
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