Porto Alegre, September 29, 2020 – The most recent data on Brazil’s agricultural Gross Production Value (GPV) for sugarcane in 2020, with values calculated for August this year, point to BRL 66.30 billion, up 0.58% from BRL 65.92 billion in 2019. This level of gain in the annual comparison of August is slightly above the immediately previous month, when the projections indicated an 0.41% increase in the GPV of cane compared to 2019.
Between July and August, the cane GPV increased by 4.05% or BRL 2.58 billion. In the meantime, in a similar way, the total GPV of crops grew 5.10% or BRL 25.17 billion, while the total GPV of agribusiness 3.90% in the margin or BRL 28.92 billion. According to the Ministry of Agriculture (MAPA), several cultures have shown production records in 2020, bringing the total value of agribusiness to BRL 771.35 billion, leveraged mainly by soybeans, corn, coffee, orange, and rice. The strong growth in the GPV of crops and agribusiness as a whole is still clearly linked to the high performance of the grain crop, which, according to the most recent data from the National Supply Company (Conab), must reach 253.7 million tons in 2020.
The grain market also finds some support from favorable international prices and the still high dollar, maintaining very high price levels internally, contributing to the current growth rates in the GPV. The rainless climate in the Center-South and Midwest reinforces another vector of development and harvest of the region’s cultures.
SAFRAS & Mercado since the beginning of May had been warning about the growth trend in the GPV of cane due to the rise in the prices of derivatives, including basically moderate gains with crystal sugar with up to Icumsa 150 and raw sugar in New York beyond the perspectives of increase in hydrated ethanol over the second half of 2020. Advances for crystal sugar with Icumsa 150 were confirmed, with hydrated ethanol reversing the trend and sugar in New York remaining practically neutral for the last 30 days. Despite this, the record cane crop can also guarantee an important volume of growth in GPV revenue or at least neutralize the downward trend observed by the price behavior of some derivatives. According to crop estimates, the Center-South alone will reach the volume of 600 million tons, besides the 50 million tons from the Northeast.