Industry officials warns a sluggish Brazilian cane harvest in the near future, even as they unveiled another spell of above-forecast over sugar output in the Centre South, which caused sugar prices to drop.
The cane industry group Unica pegged sugar production in the Centre South, which is responsible for most of the 90% of Brazilian output, at 3.41 million tons in the second half of July.
Besides being up by 9.5% compared to last year, production at that level was at 200,000 tons ahead of market expectations, as gauged by a survey by S&P Global Platts.
The survey shows a cane crush at 50.74 million tons, which is up by 2.6$ if reviewed from last year. These levels also came in a little over market expectations.
The impact on prices of the report was actually to New York sugar futures recover, because as of now its October futures stood at 13,21 cent per pound, which is a drop of 0.2% within the session, but an increase of 13.13 cents per pound at which they stood ahead of the release.
As of the end of June, Cosan has sold 1.11 million tons of sugar for this season, and 329,300 tons of sugar for 2018-2019. If compared, Cosan sold 1.83 million tons and 228,800 tons respectively as of the end of March.
Such an outlook is evident in forwards sugar hedging.