By Roberto Samora, Marcelo Teixeira and Andre Romani
SAO PAULO (Reuters) -Two of the biggest sugar and ethanol producers in Brazil late on Monday disclosed preliminary estimates of damages from fires which have burned sugarcane fields within the nation’s high state for sugar manufacturing.
4 males have been arrested on suspicion of setting the fires, which unfold shortly amid extraordinarily dry circumstances throughout hundreds of hectares of cane fields, burning into the weekend in Sao Paulo state, the biggest sugar producing state on this planet’s high producer and exporter of the sweetener.
Brazil’s largest sugar group Raizen SA estimated that about 1.8 million tons of its sugarcane, together with what it sources from suppliers, had been affected by the fires, or about 2% of the full anticipated for its 2024/25 crop.
In a securities submitting, Raizen mentioned it didn’t anticipate the fires to result in materials losses to its outcomes as it’s prioritizing the crushing of the affected sugarcane to mitigate antagonistic results.
The burned sugarcane can nonetheless be harvested and processed, mentioned Caio Carvalho, a sugar knowledgeable with Canaplan consultancy, however added mills might want to rush as a result of the cane begins dropping high quality after simply a few days following the burning.
Earlier within the day, Raizen mentioned it had resumed operations at its Santa Elisa mill on Sunday, after fires pressured the plant to be evacuated and shut final week.
Sao Paulo mentioned there have been no extra lively fires in sugarcane fields within the state on Monday, however dozens of municipalities have been nonetheless on excessive alert for fires.
One other giant Brazilian sugar and ethanol producer, Sao Martinho mentioned on Monday in a securities submitting that 20,000 hectares of its sugarcane have been impacted by the fires.
Sao Martinho maintained its 2024/25 whole manufacturing steerage, including it’s going to course of the affected cane in coming days however that it expects a discount within the industrial effectivity within the conversion to sugar.
“As a result, a reduction of 110,000 tons of sugar is estimated, offset by a proportional increase in ethanol production,” Sao Martinho mentioned.
It additionally disclosed further investments of 70 million reais ($12.7 million) from its preliminary capex steerage for the 2024/25 crop to protect productiveness within the coming harvests.
Citi analysts mentioned the drought and the fires will doubtless have a unfavourable affect on the subsequent crop in 2025, since some burned fields had cane rising for the subsequent season.
Brazil’s sugar and ethanol business group UNICA mentioned on Monday it’s going to begin to make an evaluation of the scenario within the fields within the coming days.
($1 = 5.4968 reais)
