2023-08-15 21:50:42
© Reuters. REUTERS/Paulo Whitaker
SÃO PAULO (Reuters) – Sugarcane crushing at Raízen (BVMF:), the largest global processor of the product, could grow by up to 13% in the 2023/24 harvest compared to the previous season, allowing the company to maximize production and the gains from taking advantage not only of high prices in the international market, but also of cost dilution.
The company’s crushing should be between 80 million and 83 million tons in the 2023/24 harvest, against a volume processed in the past harvest of 73.5 million tons, estimated the company’s CFO, Carlos Moura, this Tuesday in an interview to journalists.
He recalled that the month of April was very rainy, which made grinding work difficult, but then the weather became firmer, boosting processing.
“It is reasonable to assume, even if there is a risk of El Niño at the end of the harvest, by November, we are now working between 80 and 83 million tons, that is what we can reach, given the conditions, the industrial pace…”, he said. he.
“We believe this could be a good break today,” he added.
The El Niño mentioned by the executive could bring rainier weather towards the end of the harvest in some areas where Raízen operates.
Even if it reaches the highest level, the company’s crushing would still be far from the company’s capacity, of 105 million tons per year, after the acquisition of Biosev (BVMF:).
Despite still having large idle capacity, the company has been increasing the productivity of its operations in the current season, focusing heavily on sugar while prices on the New York Stock Exchange are not far from an 11 and a half year high of 27.41 cents dollar/pound weight reached in April.
This Tuesday, the first contract closed at 23.77 cents.
“We are trying to go as intensely as possible (for sugar)… even for the return that sugar has brought in relation to our production cost”, he said.
The executive commented that the formation of new inventories indicates costs of only 3.4% above last year, “which is below inflation, which is remarkable”.
“And then, as you will have a stronger grinding pace… there will be a dilution of at least another 9%, which is beneficial for us, so it is correct to assume that we will have a much lower production cost low, which maximizes the return on sugar at that price level…”
He recalled that Raízen works with future price fixing and took advantage of exchange rate volatility to maximize gains.
“The exchange rate hit… 5.60 reais,” he said.
(Reporting by Roberto Samora)
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