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USDA GAIN: Oilseeds, Cotton, Sugar, Grain and Feed

23 April 2012

USDA GAIN: Brazil Sugar Annual 2012USDA GAIN: Brazil Sugar Annual 2012

This report updates BR11016. Brazil’s MY 2012/13 sugarcane crop is forecast at 565 mmt, up 4 mmt from the previous season (561 mmt). Approximately 48.63 percent of the crop should be diverted to sugar, up 0.56 percentage points compared to MY 2011/12 due to continued strong international demand for the product. Total exports for MY 2012/13 are projected at 25.25 mmt, raw value, up 2 percent from MY 2011/12.
USDA GAIN Report - Oilseeds, Cotton, Sugar, Grain and Feed


The MY 2012/13 Brazilian sugarcane production is projected at 565 million metric tons (mmt), up 4 mmt from MY 2011/12. The Center-South (CS) region is expected to harvest 500 mmt of sugarcane, a 1 percent increase relative the previous crop (493 mmt), due to expected low agricultural yields as a result of the aging of the sugarcane fields and below average rainfall during the January-March 2012 period. ATO Sao Paulo forecasts the North-Northeastern (NNE) production for MY 2012/13 at 65 mmt, similar to 2011/12 (68 mmt).

The crushing period has just begun and two new plants are expected to come online this season. Total sugarcane area for MY 2012/13 is forecast at 9.75 million hectares (ha), up 100,000 ha from MY 2011/12 (9.65 million ha).

The industrial yield for MY 2012/13 is forecast at 139.07 kg of TRS (total reducing sugars)/mt, up 2.48 kg compared to MY 2011/12 (136.59 kg TRS/mt). The following table shows historical Brazilian yields measured in TRS per metric ton of sugarcane.

Sugar and Ethanol

For MY 2012/13, total sucrose (total reducing sugar, TRS) content destined for sugar and ethanol production is forecast at 48.63 and 51.37 percent, respectively, as opposed to 48.07 and 51.93 percent, respectively for MY 2011/12. Sugar-ethanol mills are likely to increase sugar production due to continued strong demand for the product in foreign markets. In addition, the sector should supply enough anhydrous ethanol to the Brazilian market to guarantee the 20 percent blend to gasoline.Sugar production for MY 2012/13 is forecast at 37.8 mmt, raw value, up 4 percent compared to revised figure for MY 2011/12 (36.15 mmt). The CS states should account for 33 mmt, raw value, up 5 percent from MY 2011/12 (31.25 mmt). The NNE should account for 4.8 mmt of sugar, raw value, similar to MY 2011/12.

Total ethanol production in MY 2012/13 is forecast at 23 billion liters (8.9 billion liters of anhydrous ethanol and 14.1 billion liters of hydrated ethanol. In spite of the steady increase in the flex-fuel vehicle (FFV) fleet, hydrated ethanol production is likely to be limited by the size of the crop, high prices at the pump, and the trend towards sugar production similar to what happened during the previous year.

The steady sales of flex-fuel vehicles do not solely guarantee a higher demand for ethanol given that consumers’ decisions are driven by the ratio between ethanol and gasoline prices. The 70 percent ratio between ethanol and gasoline prices is the rule of thumb in determining whether flex car owners will choose to fill up with ethanol (price ratio below 70 percent) or gasoline (price ratio above 70 percent).

Data for fuel consumption in Brazil, as reported by the Petroleum, Natural Gas and Biofuels National Agency (ANP), follow. The figures take into account the product sales by distributors and do not include illegal sales, which were common in the past for hydrated ethanol due to tax differentiation between both types of ethanol.

According to the Ministry of Agriculture, Livestock and Supply (MAPA), cumulative ethanol production for the 2011/12 crop through February 28, 2012 was reported at 21.99 billion liters – 8.45 billion liters of anhydrous ethanol and 13.54 liters of hydrated ethanol. The table below shows sugarcane, sugar and ethanol production by state for MY 2011/12, as reported by MAPA.

Sugarcane, sugar and ethanol prices in the Domestic Market

The State of Sao Paulo Sugarcane, Sugar and Alcohol Growers Council (CONSECANA) reports that the average sugarcane price (April 2011-March 2012) for the state of Sao Paulo for the 2011/12 crop is reais (R$) 0.5018 per kg of TRS, or R$ 70 per ton of sugarcane, up R$ 14.16 per ton compared to the 2010/2011 crop (R$ 0.3912 per kg of TRS, or R$ 55.24 per ton of sugarcane), due to better sugar and ethanol prices during the crushing season vis-à-vis the previous year. Note that CONSECANA’s prices are based on both sugar and ethanol prices in domestic and international markets.

The Crystal Sugar and Ethanol Indexes released by the University of Sao Paulo’s College of Agriculture "Luiz de Queiroz" (ESALQ) follow. The indices track crystal sugar, anhydrous and hydrated prices received by producers in the domestic spot market.


During MY 2012/13, ATO Sao Paulo projects Brazilian sugar consumption at 11.7 mmt, raw value, up 200,000 mt above MY 2011/12 (11.5 mmt), reflecting Brazilian population growth and a continued expansion in the food processing sector.


Sugar Exports For MY 2012/13, the Brazilian sugar exports are forecast at 25.25 mmt, raw value, up 600,000 mmt compared to the revised figure from 2011/12 (24.65 mmt), as a consequence of continued strong international demand for the product. Raw sugar should account for 19.85 mmt, raw value, whereas the remainder represents exports of refined sugar.


Post forecasts total sugar ending stocks during MY 2012/13 at 565,000 mt, up 850,000 mt compared to the revised figure for MY 2011/12 (- 285,000 mt). Note that negative stocks have been balanced by the early start of the crushing, March/April as opposed to May.


Current legislation requires gasoline sold in Brazil to have anhydrous ethanol content between 20 and 25 percent, with the executive branch having the flexibility to adjust within that band. The current blend is set at 20 percent as of October 1, 2010.

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