Brazil sugar production drops in July; cane yields fall 10%

Sugar production in Brazil’s center-south area totaled 3,61 million metric tonnes in the second half July. This is a drop of 2.16% on an annual basis. Meanwhile, sugarcane yields have decreased as the crop struggles with drier conditions.

Unica, a group of industry experts, said that in its report published on Tuesday, sugarcane crushing for the period reached 51.31 millions tons, down 3.35 percent year-over-year. Total ethanol production, however, increased by 3.47% to 2.55 billion liters.

The production data of one of the largest sugar producers in the world was on par or slightly higher than market expectations. S&P Global Commodity Insights' survey showed that sugar production was 3.6 million tonnes and cane crushing at 50.8 millions tons. Sugar prices retreated after the report.

Unica reported that a July assessment of sugarcane production showed a 10% drop in volume per hectare compared to last year's 87.5 tonnes per hectare.

Luciano Rodrigues, director of Unica, said: "This data indicates the (bad condition) of crops that are yet to be harvested."

Due to the below-average rainfall, soil moisture in the main Ribeirao preto producing area has reached its lowest level for the past seven years.

Sugar mix or cane allocation to sugar production was also lower than analysts' expectations at 50.28 %, and below what it was a year earlier. Reporting by Luana Mara Benedito, Sao Paulo; Marcelo Teixeira, New York. Editing by Gabriel Araujo & Rod Nickel.

(source: Reuters)