Sugarcane’s Sweet Success

Top Five Crop Markets, Brazil

   Sugarcane sets the pace in profitability without massive devaluation.

 Crop Total Pesticide
Sales Increase
(1999-2005)
 Planted Area
Change
(1999-2005)
Soybeans 246% 76%
Cotton 258% -23%
Maize 223%
Sugarcane 354% 26%
 Citrus 148% -22%

Despite the crisis that Brazilian agribusiness has gone through in the last two years due to the harvest frustration and unfavorable currency exchange rate, sugarcane has continued to provide a steady positive income to the growers, the millers, and those who produce, develop, and sell technology, equipment, and pesticides to this segment. This is due to various elements, among which are the sugar international quotation; alcohol exportation to the US and other countries; high international oil prices; the Brazilian technological development resulting in the addition of 20% methanol to gas; and the increased consumption of alcohol based on the new technology called flex which allows a variable mixture (0% to 100%) of alcohol and gas in the fuel tank.

Advertisement

Brazil is the leading world producer of sugarcane and holds 6.2 million hectares (Ha) of cultivated area. The state of São Paulo has the largest producing region, responsible for more than 50% of the total planted area. Together with the state of Paraná, they represent 66% of the alcohol and sugar production of the country and 60% of the total area. Brazil is the leading global producer and exporter of alcohol and sugar from sugarcane.
 

Furthermore, yields increase in the cultivated area every year.

The Growth Leader 

Top Articles
ADAMA Reports Fourth Quarter and Full Year 2023 Results

Between 2004 and 2005, the growth of pesticide sales for sugarcane culture met with an increase of approximately 24% in dollars, resulting in sales of US $390 million at the distributor level. On the other hand, soybeans, the largest pesticide market in Brazil, suffered a sales decrease of about 15%.

Among pesticide distributors, it is worthy of notice that companies focused on soybeans, maize, and wheat had the largest decrease in wholesale when compared to companies focused on sugarcane, as is the case with DuPont, which has more than 30% of its sales in this crop market and is the leader in the sugarcane segment.

Demand Outlook Positive

In Brazil, sugarcane has huge growth potential, mainly because of expected rises in the price of fuel originated from nonrenewable sources, and also due to the fact that in the last three decades, both the Brazilian government and the entrepreneurs in this segment

have been constantly developing state-of-the-art technologies for the use of methanol as fuel source, which are currently available in the market. The export potential of biofuels continues to surge.

In addition to that, edaphoclimatic conditions are extremely favorable for the cultivation of sugarcane, which grows vigorously in the Southern, Southeastern, Midwestern, and Northeastern regions. It is estimated that by 2012, the sugarcane area in Brazil will reach 9 million Ha, responding to a local demand of 27 billion liters of alcohol and exportation prospects of 6 billion liters per year.

Hide picture