Raízen projects stable sugarcane crush, carries more sugar stocks
Brazilian sugar giant Raízen anticipates stable sugarcane crushing volumes of 82-85 million metric tons in the current crop year, despite less favorable weather conditions. The company’s recent financial results revealed a smaller profit, attributed to reduced tax credits and lower ethanol prices. Raízen’s ethanol and sugar stocks surged significantly, with plans to optimize sales strategies amidst market fluctuations. CEO Ricardo Mussa remains optimistic about sugar prices despite recent declines in futures.
May 14 (Reuters) -Brazil’s Raízen RAIZ4.SA, the world’s largest sugarcane processor, expects to crush 82 million to 85 million metric tons of cane in the crop year started in April, basically unchanged from thelast season despite less favorable weather.
Company executives told analysts and reporters on Tuesday cane crushing volumes will remainstable despite drier weather in Brazil’s Centre-South region due toextensive field work to improve agricultural yields.
On Monday, Raízen posted asmaller-than-expected profit for the 2023/24 season, mainly due to the impact of fewer tax credits, but also because of lower ethanol pricesin the country.
Shares of Raízen, whose main shareholders are Brazilian conglomerate Cosan SA CSAN3.SA and Shell Plc SHEL.L, fell1.6% mid-session in Sao Paulo.
Raizen’sethanol stocks at the end of the 2023/24 crop rose 76% from a year earlier to 526 million liters, while its sugar stocks surged 91% to525,000 tons.
Ethanol stocks rose as Raizenpostponed sales to get better prices later in the year, while sugar stocks grew under its “market allocation strategy,” the company said.
Raízen CEORicardo Mussa said the company remains optimisticabout sugar prices even as raw sugar futures fell on ICE SBc1 this weekto the lowest in 18 months.
He said theglobal stocks-to-use ratio, a measure of supply availability, remains historically low for sugar as demand grows and the market increasingly relieson Brazil for supply which will declinein the new season.
Raízen did not provide guidance for its sugar production in 2024/25. It produced 5.83 million tons in 2023/24, 22% more than in the previous crop.
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