(Bloomberg) — Over the weekend, an unprecedented series of fires ravaged sugar-cane fields in Brazil, the world’s leading sugar producer, threatening global sweetener supplies and potentially driving up prices. This incident may have a more significant impact than the severe frost that damaged crops in 2021, according to Alvean, a leading sugar trader. “The fires of 2024 are like the frosts of 2021, but on steroids,” stated Mauro Virgino, trading intelligence lead at Alvean.
The fires have severely damaged sprouting sugar cane, potentially reducing future yields as producers may need to replant. The state of Sao Paulo, the largest sugar-producing region in Brazil, has experienced record-breaking fires due to low humidity and extreme heat. Around 60,000 hectares of crops were affected, with approximately 2,000 fire outbreaks reported over the weekend, according to the sugar cane industry group Orplana.
“In 20 years in the business, I had never seen anything like it,” said Almir Torcato, executive director at cane growers association Canoeste, which represents over 2,000 farmers. Raw sugar futures surged as much as 4.2% in New York, marking the largest intraday jump in a month.
Preliminary estimates by Green Pool Commodity Specialists and FG/A suggest that around 5 million metric tons of sugar cane might have been lost in Sao Paulo due to the fires, representing about 1.4% of the region’s crop. While some burnt cane might still be viable for processing, overall sugar production impacts remain uncertain.
Historically, fires were part of the sugar production process but have become obsolete with modern technology. Nonetheless, industry players have some experience dealing with burnt cane. However, the current challenge is significant: if processing is delayed, productivity could suffer, and many companies already have limited resources to manage fire consequences.
More updates are expected with upcoming sugar production data, but the full extent of the damage remains to be seen. For further details, visit bloomberg.com.
Original Story https://www.livemint.com/news/massive-fires-to-hurt-sugar-production-in-top-supplier-brazil-11724691812103.html
Category :
Tags:
