The widespread fires that hit sugar cane fields in Brazil over the weekend are likely to have a negative impact on global sugar supplies and lead to higher sugar prices, Bloomberg reports. Brazil is the world’s largest sugar exporter.
The impact on sugar cane production
According to Alvean, a leading sugar trader, the current fires will have a more significant impact than the major frost that hit Brazil’s sugar cane production in 2021. “The scale of the problem is much bigger now,” said Mauro Virgino, an analyst at Alvean. “The 2024 fires are like the 2021 frosts, but on steroids,” he added.
The state of Sao Paulo, which accounts for the largest share of Brazil’s sugarcane production, is now facing a record number of fires due to the heatwave and low humidity. Fires there affected up to 60,000 hectares of fields over the weekend, according to the Brazilian sugarcane producers’ union Orplana.
Trading
The negative effects of the current fires could persist into next year. “In 20 years in the business, I have never seen anything like this,” said Almir Torcato of the Canoeste union, which groups sugarcane growers in western Sao Paulo state. “We have received numerous requests for help,” he added.
Prices of raw sugar futures on the New York Mercantile Exchange gained more than four per cent during today’s trading. Preliminary estimates by consultancies Green Pool Commodity Specialists and FG/A suggest the fires in Sao Paulo state could have led to the loss of up to five million tonnes of sugar cane, Bloomberg reports.
source: ČTK
