“The 2024/25 sugarcane harvest is starting now, on April 1st, and comes with some unknown variables…”
Almir Torcato is the corporate manager at the Association of Sugarcane Farmers of the West of the State of São Paulo – Canaoeste, with a degree in law from Anhanguera Educacional, specialist in strategic agribusiness management from Esalq, with an MBA from Saint Paul Business School.
Almir Torcato, corporate manager at Canaoeste
AgriBrasilis – What factors motivated the 2023/24 sugarcane super harvest?
Almir Torcato – After going through harvests with adverse situations, with drought, frost, fires, we can say that this harvest was one of redemption. In 2023/24, we had a number of positive factors: good weather conditions, favorable prices, and decreasing input costs. These reasons justify an estimated production of 652.6 million tonnes. We are optimistic for the 2024/25 harvest, but it is likely that it will present more modest numbers when compared to 2023/24.
We have a fairly good outlook for the 2024/25 season regarding results. What is a result? It is when you take from all the revenues the expenses and see how much is left at the end of each hectare of sugarcane production.
“We are optimistic for the 2024/25 sugarcane harvest, but it is likely that it will present more modest numbers compared to 2023/24”
AgriBrasilis – What are the expectations for the 2024/25 harvest? Is the scenario pessimistic?
Almir Torcato – The scenario that is being drawn is not yet pessimistic, but we should certainly see more modest figures. Although with a slight decrease in yields – from 5% to 10% – when compared to the last sugarcane harvest, considering the climate issue, 2024/25 should not be such a bad harvest.
We are not pessimistic, but we cannot rule out the existence of certain variables, such as international market complications, wars, public policies, which can alter the scenario.
AgriBrasilis – What should be the impacts of inputs (prices, supply, etc.) on the market?
Almir Torcato – We had a decrease in the price of inputs, especially fertilizers, which showed reductions of up to 40%, which reflects a return to pre-pandemic standards. This readjustment of inputs, combined with the good yield rates of this harvest, gives a “breather” to the sector, and makes things end up settling down and getting back on track, improving revenue for sugarcane farmers.
AgriBrasilis – Sugar prices are 60% higher than the equivalent values for Brazilian ethanol. Why?
Almir Torcato – This point is a matter of the international market, of supply and demand. This also depends on the situation of other sugar-producing countries in the world. When the world stock is not in surplus, the tendency is to put pressure on the prices of sugar, making it very competitive. However, we are talking about a competitive issue in relation to ethanol, which also depends on energy policy issues, such as, for example, if Petrobras interferes in the price of gasoline to control inflation – remembering that the final price of ethanol always has a parity in relation to the fossil fuels in Brazil.
With regard to ethanol, the scenario is still being drawn, and depends on political aspects, government preferences, subsidies and issues related to energy policy. So, this issue does not necessarily involve a single aspect to increase or decrease the price of ethanol, which is still closely linked to the price of gasoline. Thus, the price of ethanol today is an aspect of the market, and does not have to do exclusively with production.
Ethanol is not paying like sugar right now. We depend on policies, but for now nothing signals a contrary movement. Therefore, we believe that 2024/25 will be a more “sugary” harvest.
AgriBrasilis – Why should 2024/25 sugarcane crops be “irregular”?
Almir Torcato – Because we had rains in some spots, but not in a uniform way: we had regions that were quite privileged regarding rainfall, while others not so much.
AgriBrasilis – What is expected from the climate and the possibility of La Niña?
Almir Torcato – The 2024/25 sugarcane harvest is starting now, on April 1st, and comes with some unknown variables. The first point is the climate issue: we have come out of El Niño and we now have the possibility of La Niña. We need to wait for the behavior of the rains. If there are no severe climate issues, here in the Canaoeste region we are estimating a yield similar to or slightly lower than that of the last harvest, with about 3% to 5% os loss.
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