Scenario is positive for prices in 2021; production of sugarcane crops should be lower

Cepea, January 15, 2021 – Agents from the Brazilian sugar-energy chain are optimistic about revenue from the ethanol and sugar segments, despite the uncertainties about the conditions of sugarcane crops in central-southern Brazil in the 2021/22 year-crop. The dry weather in 2020, which did not affect the 2020/21 crops, should delay the development of the sugarcane to be harvested in 2021.

 

Crushing of 2021/22 crops in central-southern Brazil should begin in April, and the season should not be anticipated as in previous years. However, those who are more optimistic believe that the weather may be favorable to sugarcane crops in the first two months of 2021, allowing crops to recover and with only little changes in the Total Recoverable Sugar (TRS) value available.

 

In the 2021/22 year-crop, the production mix should ne adjusted to the expectations for ethanol and sugar prices, as in the 2020/21 season. Remuneration from sugar should continue higher than that from ethanol in 2021, considering the scenario expected for each one of these markets, both in the Brazilian and the international markets, thus, mills should prioritize sugar production.

 

As regards prices in 2021, agents from the Brazilian market of hydrous ethanol expect future contracts to be higher than 2,000 BRL/m3 at B3 (São Paulo Stock Exchange).

 

The demand for fuel is not expected to decrease as in the second and third quarters of 2020, despite the increase in the codi-19 pandemic.

 

(Cepea-Brazil)

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