July 2 (Bloomberg) -- The sugar cane crop in Brazil’s center south, the main growing region of the world’s biggest producer, will be 494 million metric tons in 2012-13, according to Usina Alta Mogiana S/A, a sugar mill in the Sao Paulo state.
Output in the region fell for the first time in a decade in the 2011-12 season to 493.3 million tons, data from industry group Unica showed. Sugar production will total 31.45 million tons, said Marcos Mine, a risk manager at the Sao Joaquim da Barra, Brazil-based mill. He correctly forecast a rally in sugar prices last year when working for ICAP do Brasil Ctvm. Last season’s output was 31.3 million tons, Unica data showed.
“The recent rains are likely to benefit agricultural yields and may result in higher cane output per hectare this year,” Mine said by phone today. “The sucrose level, however, may be smaller as the cane absorbs more water, diluting the sugars.”
The sugar content in the cane will be 135 kilograms (298 pounds) a ton, the mill estimated. That compares with 137.5 kilograms a ton last season, according to Unica data. Rains in May and June have cut sugar output for the season through June 15 by 28 percent to 4.895 million tons, Unica said on June 26.
“If we have dry weather in the key months of July, August and September, it may still be possible to catch up with the harvest delays somewhat,” Alta Mogiana’s Mine said.
Mills may extend the season by another 15 days into December, but harvesting is unlikely to be extended beyond that, he said, adding that units have to stop for maintenance.
“At the moment, it looks like next season’s output may be bigger, so mills may opt not to extend the harvest this year to prepare for the next,” Mine said. Research companies Datagro Ltd. in Barueri, Brazil, and Kingsman SA in Lausanne, Switzerland, said millers may extend processing through January. Rains that usually increase by the end of the year may also prevent millers from extending the cane processing period, Mine said.
Cane output in the center south could fall for a second year if an El Nino, a warming of the waters of the Pacific Ocean, brings more rainfall than usual, Mine said. Under the weather conditions, production could fall to 475 million tons.
Usina Alta Mogiana will crush 4.9 million tons of cane this year, Mine said.
To contact the reporter on this story: Isis Almeida in London at Ialmeida3@bloomberg.net
To contact the editor responsible for this story: Claudia Carpenter at Ccarpenter2@bloomberg.net.