On Tuesday (18) UNICA disclosed its follow-up crop report related to the end of December, which virtually indicates 2010/11 crop final numbers.
With earlier milling activities beginning and drop in cane planting productivity related to drought which impacted the region from May to September, crop end was anticipated.
From April to December, 33,463 thousand tonnes of sugar were produced, 17% up from 2009/10 crop.
Nevertheless, perspectives for next cycle are not very favorable, with some factors which may contribute to maintenance or reduction in Centre-South sugar production in 2010/12.
No expansion in the region's cane plantings and bisada cane (sugarcane which was not processed in the last harvest) shortage, different from 2010/11 crop may have influenced this scenario.
Lower farming yield in the second semester of 2010, which may persist in 2011/12 crop, also contributed to this unfavorable scenario.
Even with strong rainfall in recent weeks, part of the region crop damage may not be reverted.
Accordingly, concerns regarding sugar availability in mid-year improved, once Asian players will be in off-crop period and world demand may count on Brazil's crop to meet its sugar strong demand.
Raw sugar futures may indicate medium term players concerns, with stronger growth in back month contracts.
Since early year, while March futures contract dropped 100 points and May decreased 2, July and October contracts improved 114 and 131 points, respectively.
This Tuesday, sugar futures closed with slight growth in NY and London.
March contract attained 31.12 c/lb, 23 points up from the prior day, with narrowing in Mar/11-May/11 spread, which went from (+) 196 to (+) 182 points.
Brazil Planning, Resource and Special Projects Group