Brazil has been hit with an unusually harsh winter this yr with temperatures dropping to freezing ranges for a number of days, hurting crops from corn to espresso and sugar cane. The frost follows one of many nation’s worst droughts in many years, which additionally hit the nation’s agricultural trade arduous.
Broker StoneX reduce its projection for Brazil’s center-south (CS) sugar manufacturing to 34.6 million tonnes for the present crop, down from a May projection of 35.7 million tonnes, and 10% under final season’s file quantity of 38.4 million tonnes.
Asian commodities dealer Wilmar, one of many world’s largest sugar retailers, slashed its estimate for Brazil manufacturing on Tuesday, saying it solely expects round 28 million tonnes of sugar in 2021/22 as a result of in depth harm to cane fields.
Prices have soared on the anticipated crop loss. Sugar futures in New York had been close to the best in 4 years final week.
Karim Salamon, Wilmar Sugar head of study, mentioned that the widespread frosts will end in decrease agricultural yields resulting in a cane crush of round 490-500 million tonnes. Brazil’s CS crushed 605 million tonnes final season.
StoneX additionally expects the entire cane crush to fall, however not as a lot. It sees it at 541 million tonnes, down from its earlier view of 568 million tonnes.
The dealer mentioned it could not rule out additional cuts to its projections, because the full extent of damages to crops from the three waves of frosts that hit Brazil are nonetheless being assessed.
StoneX now sees the worldwide 2021/22 sugar provide steadiness swinging to a deficit of 1 million tonnes, from a surplus of 1.7 million tonnes seen in May.
Wilmar mentioned that Brazil’s subsequent sugar season would probably undergo as nicely.
“Immature cane stalks can be very susceptible to frost damage,” Salamon mentioned. “This is in addition to the impact of lower replanting resulting from the recent droughts.”