Center-South sugarcane crops should receive US$ 2.8 billion dollars this year
Valor Econômico
After two consecutive years of little investment, the sugarcane crops of the Midwest and South regions should get back to the focus of the sector. It is estimated that at least R$ 5 billion (US$ 2.8 billion) should be injected to improve an area of nearly 1.4 million hectares of sugarcane in the States of Midwest and South - São Paulo, Minas Gerais, Paraná, Mato Grosso do Sul, Goiás and Mato Grosso this year. The greater revenue of the sugarcane plants and suppliers, allied to the perspective that 2010 should be a year of paying-off prices for the sugar and alcohol justifies the investments. Both plants and suppliers of raw materials should invest in the replanting of the sugarcane crops, says Ismael Perina Júnior, President of the Organization of Sugarcane Producers of the Midwest and South Regions (Orplana).The 1.4 million hectare area is equivalent to something between 18% and 20% of the total area of the Midwest and South, which is nearly 7 million hectares. The percentage is perfect for the annual renewal of the sugarcane crops, but over the past two harvests, according to Perina, it was not reached. "I believe another 1.4 million hectares were not renewed in the 2008/09 and 2009/10 harvests". Besides the lower of renewal of the crops, he says, the use of technology in the current crops has also been reduced. According to Perina, the results are already beginning to be felt in this harvest. "There are suppliers delivering sugarcane with low sugar performance. Such investments have to be made so that the supplier returns to the economically viable cycle".
The reason for the lesser investment of funds was the low price paid for the sugarcane. In addition, the global crisis and the crisis of the sugar and alcohol sector itself have contributed for many plants to fail paying their suppliers. If the investments are not made, says Perina, the consequence will be the shortage of sugarcane in the coming years. According to him, there are already indications of lack of sugarcane in some producing regions in the Midwest and South. He makes it clear those are specific cases, and they are more common in the regions where there were serious problems of defaults in the payment from the plants to the sugarcane suppliers.
In the last harvest, 2009/10, the suppliers of sugarcane received, on the average, R$ 46.35 (US$ 25.75) per ton of delivered raw-material, still below the cost of production, which was R$ 53.43 (US$ 29.7), but 16% above what was received in the previous year, at the 2008/09 harvest. With the current prices of sugar and alcohol up, Perina believes the profitability per ton of sugarcane will rise again this year.