PRADÓPOLIS, Brazil (Reuters) - The world’s largest sugarcane processing plant, a Brazilian mill able to process 10 million tonnes per year, has recorded a drop in cane crushing for the second consecutive season because of excessive dryness in Sao Paulo state, an executive said on Thursday.
Brazil’s center-south, the world’s largest cane growing region, will likely have a smaller crop this year for the fourth consecutive year. Besides the weather, analysts blame factors including financially-troubled companies reducing investment.
But the owner of the mill, Sao Paulo-listed Sao Martinho SA , is one of the few companies in the Brazilian sugar industry that has stayed in the black, having reported profits for almost every quarter in the last four years, while maintaining normal levels of cane field renovation and crop care.
The mill’s cane crushing capacity will fall primarily because of drier soil caused by less rain, and contributing to a smaller crop, the executive said.
“It has been like that for the last four years or so - drier,” said Mário Ortiz Gandini, the head of Agriculture and Technology at Sao Martinho SA, which owns the mill in the municipality of Pradópolis, Ribeirão Preto region.
Gandini hopes the dryness is not a permanent trend, he told Reuters on the sidelines of an event organized by machine maker CASE IH [CNHCN.UL] to present a new cane harvester.
“I prefer to believe that this is temporary. I don’t think it is a new pattern,” Gandini said.
The Sao Martinho executive said that temperature fluctuations in the Pacific Ocean, which drive the climate phenomenon known as El Niño and La Niña, are impacting rain levels and are likely to blame for the dryness. The company uses data measuring Pacific Ocean temperatures to plan forward operations, he said.
The average cane production in the 135,000 hectares around the Usina Sao Martinho in Pradópolis is likely to reach 85 tonnes per hectare in the current season, Gandini said - down from 90 tonnes per hectare in the previous crop and a historic average of 95 tonnes per hectare.
Gandini said the center-south region’s fields were experiencing below-average rains and next year’s production will depend on rains from October to February.
Reporting by Marcelo Teixeira; editing by Grant McCool