Brazil Sugar Production Hits Record High: Reuters

Brazil's sugarcane crop for the 2024/25 season is expected to decline slightly from the previous year's record high, while sugar production is projected to reach an all-time peak, according to a report by the Brazilian government agency Conab cited by Reuters.

Conab forecasts the total sugarcane crop at 685.86 million metric tons, a 3.8% decrease from the 2023/24 season. The decline is attributed to falling agricultural yields caused by below-average rainfall and excessive heat. However, a 4.1% increase in planted area to 8.67 million hectares is partially offsetting the yield decline.

"Conab surprised the market with that area increase," said a U.S.-based sugar trader, as quoted by Reuters. "Others such as USDA see a much smaller expansion."

Despite the slight dip in sugarcane production, Conab projects sugar output to reach a record high of 46.29 million tons, a 1.3% increase from the previous record-breaking season. This increase is driven by mills allocating a larger portion of sugarcane to sugar production rather than ethanol.

Ethanol production, both sugar and corn-based, is expected to fall by 4% to 34.18 billion liters. However, corn-based ethanol production is projected to grow by 16%, while sugar-based ethanol output is expected to decrease by 8% as mills prioritize sugar production.