Brazil May Have 71M Tonnes and 1M Hectares of Unneeded Sugarcane
- Brazil’s long-ailing sugarcane processing industry is taking another hit as the COVID-19 pandemic slashes fuel use worldwide. In Brazil ethanol made from sugarcane and gasoline compete directly at filling stations. Brazilian sugar industry group UNICA reports ethanol sales in the key center-south region dropped 20% in late March. And in recent weeks, vehicle movement on Brazil’s roads has been further restricted. Reduced ethanol demand means mills will either produce more sugar or crush less cane. Using sugarcane crushing, ethanol production, and cane growing area data available in Gro, we calculated the impact of a sustained reduction in ethanol demand in Brazil. A 20% decline in ethanol production in center-south Brazil would mean that 71 million tonnes of cane wouldn’t need to be processed. That in turn means that more than 1 million hectares of sugarcane wouldn’t need to be harvested. We’ve assumed that the amount of cane processed into sugar will rise from 34% last year to 40%.