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UPDATE 1-Brazil cane crop may yet recover from dry months -Raízen
September 15, 2017 / 10:57 PM / 2 months ago

UPDATE 1-Brazil cane crop may yet recover from dry months -Raízen

(New throughout, adds comments from CEO, information on possible crop damage)

By Rodrigo Viga Gaier

RIO DE JANEIRO, Sept 15 (Reuters) - It was still too early to assess possible damage that below-average rains will do to next year’s cane crop in Brazil’s center-south, the Chief Executive Officer of Raízen, the world’s largest sugar producer, said on Friday.

Raízen, a 50-50 joint venture between Cosan SA Indústria e Comércio and Royal Dutch Shell Plc, plans to crush up to 63 million tonnes of cane in the current crop season, more than 10 percent of total Brazilian cane output.

Raízen CEO Luis Henrique Guimarães said that even under very dry conditions currently, cane fields could recover during Brazil’s summer if there is ample rain.

Some of the top cane producing regions in Brazil received less rain than normal in recent months. The fields are going through a very dry September with no forecast for any precipitation until the end of the month.

Cane industry group Unica said productivity in the current season could fall at the end of harvesting in the last quarter and agricultural yields next year could also be hurt.

“Summer rains are key to assess production potential for next year. Let’s see how much rain we will get in January and February,” Guimarães told Reuters after taking part in an energy seminar in Rio. He said Raízen is sticking to its guidance for the crop for now.

Guimarães said the firm is trying hard to cut sugar production costs as much as possible, to remain profitable even amid depressed international prices.

The company is continuously looking for ways to be more efficient, he said, using tools such as better cane varieties, precision agriculture and innovative industrial processes.

“We are looking to reach a production cost near 11 cents per pound,” said the Raízen CEO.

Industry analysts believe most mills in Brazil’s center-south produce sugar at a cost around 13 cents per pound. (Writing by Marcelo Teixeira; Editing by Paul Simao and David Gregorio)

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