By Roberto Samora and Marcelo Teixeira
SAO PAULO (Reuters) – Fires in Brazil sugarcane fields in recent days have helped drive prices to a five-week peak and added to problems with the crop.
The fires, despite the damage from the blazes being limited, are yet another negative factor for the world’s largest sugarcane producer.
Experts said that mills will lose sugar production from the fires and there will be problems for those burned fields next year, despite the land hit by the fires being small considering the Centre-South planted area.
“It is not really about the (fire) damage but it is a warning sign for the state of the back half of the crop harvest and an alert for the 2025/26 crop,” said New York-based sugar broker Michael McDougall.
Around 80,000 hectares of sugarcane fields were burned in the last week, according to data from Orplana, an association of sugarcane growers. That accounts for a bit more than 1% of Center-South’s cane area of 7.65 million hectares.
Farmland where cane was growing will probably have to be replanted after the fires, said Orplana Chief Executive Jose Guilherme Nogueira, which will likely hurt yields for 2025.
The bigger worry, experts said, is that fields continue to be extremely dry, with some areas not having rains for 160 days, which could also cut next year’s production potential. Dozens of municipalities in Sao Paulo state continue to be under high alert for new fires.
“The last time that we had such a prolonged dry spell, in 2021, the Center-South lost some 80 million metric tons of sugarcane production,” said Tarcilo Rodrigues, a director at trader Bioagencia in Sao Paulo. He thinks something similar could happen in 2025, adding that the current crop could end earlier.
Industry group Unica said on Thursday that sugarcane agricultural yields in July were 12% smaller year on year, as the fields feel the impact of low soil moisture.
Arnaldo Correa, a partner at Archer Consulting, believes that the current sugarcane crop could fall to 580 million tons, below the market consensus of 600 million to 610 million tons.
He said that some mills are not closing new contracts to sell sugar due to uncertainty regarding their future production.
“We will have a long between-harvests period in Brazil, from end-October to April,” he said. “With India out of the export market and funds heavily short, prices could go higher.”
(Reporting by Roberto Samora in Sao Paulo and Marcelo Teixeira in New York; Editing by Mark Porter)
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