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Brasil: Brazil: Brazil could add 200 mln T cane in 2 yrs-Cosan

Published at: 29/09/2011
source: http://www.reuters.com
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SAO PAULO, Sept 28 (Reuters) - Brazil could add 200 million tonnes of cane to its crop in two seasons, simply through the recovery of existing cane yields, the chief executive of the country's largest sugar and ethanol producer Cosan (CSAN3.SA) said on Wednesday.

SAO PAULO, Sept 28 (Reuters) - Brazil could add 200 million tonnes of cane to its crop in two seasons, simply through the recovery of existing cane yields, the chief executive of the country's largest sugar and ethanol producer Cosan (CSAN3.SA) said on Wednesday. Yields in Brazil have fallen dramatically this year due to aging cane fields that are overdue for replanting and unfavorable weather conditions during the crop development. Brazil, the world's largest sugar producer and exporter, is expected to crush no more than 589 million tonnes of cane, down sharply from 642 million tonnes forecast in May at the start of the season, according to official estimates. This is the first drop in output in more than a decade. "It's possible, in two years, to recover that (200 million tonnes of cane). This does not take into account the addition of new areas, only the recovery of existing fields," Cosan's CEO Marcos Lutz told Reuters on the sidelines of an event. Brazil accounts for more than half of the global sugar trade, therefore any variation in production can have a pronounced impact on international sugar prices. Lutz said the country's current crushing capacity exceeds cane output about 200 million tonnes. For the next season, Lutz sees the potential increase in cane availability as a bit lower than 100 million tonnes as many companies are resuming the replanting of fields. Newly planted cane take at least a year to return to full output. The industry is behind in its replanting schedule due mainly to the financial crisis of 2008, which caused mills to put off the expenses of the cane renewal. The high prices of sugar over the past few years contributed to that as mills did not want to miss out high returns by taking some fields offline to replant. Brazil's cane industry has not kept up with local market demand for ethanol, which has been driven by the strong sales of flex-fuel cars that can run on any mix of ethanol or gasoline.

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