Brazil expects a record sugar crop in the new season, with exports set to increase by 70% - Conab forecast.

The Brazilian food supply agency Conab has presented the latest forecast, according to which the total sugar production volume in Brazil for the 2020-2021 season (April-March) will increase by 32% and reach a record high of 39.33 million tonnes. This is due to companies allocating more raw material for sugar production and less for ethanol production. This information is reported by the Reuters news agency.

Conab has also presented a forecast for national production, which includes the South-Central and North-Northeast regions of Brazil. According to the forecast, the total sugarcane processing volume will be 642.07 million tonnes, which is 0.1% less than in the 2019-2020 season.

Brazil will remain the world's largest sugar producer this season, surpassing India, which is also expected to produce a significant amount of sugar - around 32.5 million tonnes in the 2020-2021 season.

Conab also reported a 70% increase in Brazilian sugar exports in the first four months of the current season.

The agency stated: "We expect exports to remain at a high level, thanks to the recovery of sugar prices, the weakness of the local currency, and supply restrictions from some major producers in Asia."

According to forecasts, Brazil's major competitor in the international market, Thailand, is expected to see a further reduction in sugarcane crops due to ongoing drought, to the lowest level in the past 10 years. At the same time, the Brazilian real fell to its lowest level against the dollar since May this Thursday.

According to Conab, sugarcane planting areas in Brazil have decreased to a minimum since 2016 as farmers switch to more profitable crops such as soybeans and corn. It is expected that the total sugarcane planting area in the current season will be 9.75 million hectares, which is 2.9% less than in the 2019-2020 year.

As plants increase sugar production by reducing ethanol production due to higher sugar prices, Conab forecasts a 14% decrease in total ethanol production volume this season to 30.56 billion liters. This number includes corn ethanol production, which is expected to grow by 61% to 2.69 billion liters in the current season.