December 20, 2018 / 6:16 PM / 6 months ago

UPDATE 1-Brazil sugarcane crush seen stable next season after 2018-19 dip

(Adds details from the press conference)

By José Roberto Gomes

SAO PAULO, Dec 20 (Reuters) - Crushing in Brazil’s main sugarcane producing region for the 2019-20 season should roughly match this year’s production, as planted area shrinks but yields improve, analysts said on Thursday.

For the current 2018-19 season, which ends in December, mills in the center-south region are expected to crush roughly 570 million tonnes of sugarcane, according to Antonio de Padua Rodrigues, the director of industry group Unica. That represents a decline of roughly 4 percent from the 2017-18 season.

But Unica predicts that crushing will stabilize in 2019-20, matching the current season’s level. Rodrigues declined to give an exact prediction for sugarcane processing next year, cautioning it is still early to make a precise forecast.

By mid-December, the amount of sugarcane processed in the center-south of Brazil had stood at 556.8 million tonnes, according to the industry group.

The 2019-20 season will continue to be “very alcoholic” with millers continuing to direct a majority of the cane to producing ethanol due to the fuel’s relative price advantage over sugar, Rodrigues said. Some 65 percent of the center-south cane was directed to ethanol production in 2018, Unica data showed.

Yields next season could increase 0.5 tonne per hectare as the average age of cane fields will fall from 3.72 years to 3.66 years, said Luiz Antonio Dias Paes, market and business director at sugarcane group Centro de Tecnologia Canavieira SA (CTC) .

That would offset an expected decrease in planted area of around 1 percent, as some farmers switch to grains, Paes said.

“So far, all is going well. If we have a normal summer, the expectation is that sugarcane yields will grow,” Paes said. (Reporting by José Roberto Gomes, writing by Ana Mano Editing by Alistair Bell)

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