Orplana CEO: Sugarcane farmers in Brazil's key region are feeling the pinch of low prices

Sugarcane growers in Brazil's central-south region feel the pinch due to low sugar prices. They do not want their crops to expand and may even reduce the area they plant with the crop. Jose Nogueira is the CEO of the cane growers association Orplana. He said this on Friday.

Last week, raw sugar futures reached a low of 14,04 cents per lb. Prices had dropped to 14.96 cents a lb on Friday but were still subdued in comparison with recent highs.

Nogueira added that the looming low returns on sugarcane investments would affect producers' investment in their fields, and could potentially impact output for the 2027/28 harvest.

Orplana's CEO was on a field visit to meet with dozens producers in the area of Assis, a municipality located in Brazil's state of Sao Paulo.

Nogueira stated that "producers don't want to plant additional sugarcane areas." He added that some farmers are putting off investments and renewal in sugarcane field or reducing their cane crop size.

He said that some farmers would be wise to switch crops. The current soy prices are not attractive to growers in the area.

The industry group UNICA announced earlier on Friday that the sugar blend - the amount of sugarcane used to make the sweetener in the middle-south region - had fallen from 55%, a record high in August.

Nogueira explained that the rise of corn ethanol production in Brazil has made it less viable for sugarcane growers to use more sugarcane as fuel.

Nogueira stated that ethanol prices haven't risen as expected "mainly due to the effect of corn-ethanol and the amount of corn-ethanol we have seen." Oliver Griffin is reporting, Nick Zieminski is editing.

(source: Reuters)