Tereos, the world’s second-largest sugar producer, plans to increase production of the commodity in Brazil in the new 2024/25 harvest, with an investment push that will advance the “mix” to 70% of total sugar cane processed for the production of the sweetener, said the group’s managing director in the country, Pierre Santoul.
This should mean a three percentage point increase over the total recorded in the last cycle, as sugar continues to be more profitable than ethanol. Tereos’ sugar mix is around 20 percentage points above the average for the Centre-South, maintaining the French company’s tradition of focusing more on sweeteners.
Sugar production at the Brazilian plant, which accounts for about 30% of the company’s profits, which does much of its business in Europe, is expected to increase to about 2 million tonnes, up from 1.9 million tonnes of the previous season. Santoul said, in an interview with Reuters.
The executive also highlighted that as the mix increases, Tereos’ sugar production will grow although the company’s sugarcane crushing in Brazil is expected to remain stable in 24/25 compared to the record of 21.1 million tonnes recorded in the previous cycle.
This support for crushing is expected despite an expected crop failure of around 10% for the entire Center-South, due to low rainfall starting in December.
According to him, Tereos has been splitting sugarcane left over from last season, which could compensate for the lower agricultural productivity expected in 2024/25, ensuring that crushing does not decrease. He did not comment on the failure rate in the company’s sugarcane fields.
“We expect an equal and stable crop, essentially because we have doubled the sugarcane, we are not able to mill all of our sugarcane, so we have a cushion, we are able to absorb a drop in productivity without impacting our crushing” , said Santoul, recalling that the company is traditionally the one that obtains the highest volume harvested per hectare among the largest in the sector in the country.
Santoul underlined that Tereos is among those “players” who are most “pessimistic” on the average productivity of sugar cane in the Center-South, recalling that the estimates for the next harvest in the main region of the largest producer and exporter of sugar vary from one milling to From 580 to 620 million tonnes, against the record of 660 million in the cycle which ends at the end of March.
“Tereos expects production just under 600 million tonnes,” he said.
According to him, the lower harvest expected for south-central Brazil should, “without a doubt”, support the price of sugar in the world, which benefits the global activities of the company, which produces sugar from European beet.
“Every month we review the outlook, this certainly helps support current prices and could have an upward impact on prices when the Brazilian harvest begins and we have more visibility on the state of the sugarcane fields.”
The president of the Brazilian operation estimates that the raw sugar market has room to rise to 24 or 25 cents a pound, “if our negative crop forecast for Brazil is confirmed.” This Monday the market was near 23 cents.
Faced with the historically high sugar prices of recent times, Tereos has invested approximately 15 million dollars in the expansion of its factories in Brazil with the aim of increasing the “mix”, which guarantees the consolidation of its position as the second largest sweetener producer in Brazil, although it has a lower grind than some of the large groups.
He recalled that it is much more economically advantageous to produce sugar, pointing out that when ethanol is sold on the domestic market the price is equivalent to 15 cents per pound for sugar.
REDUCTION OF EMISSIONS
Santoul said that in a few months Tereos will confirm its global commitment to reduce CO2 emissions in scopes 1 and 2 by 50% by 2032 (base 2022), to reach “net zero” levels in 2050, as well as setting a target to reduce scope 3 gases by 36% in the same period.
These emissions reductions are in line with the SBTi (Science Based Targets) commitments undertaken by the company, the most stringent international sustainability standard.
“Tereos will be the only group in the sector in Brazil to have SBTi commitments…”, he said, recalling that the company is “aware of the barriers that are being built in the agricultural world”, which require the adoption of the highest sustainability standards.
Source: Terra
Rose James is a Gossipify movie and series reviewer known for her in-depth analysis and unique perspective on the latest releases. With a background in film studies, she provides engaging and informative reviews, and keeps readers up to date with industry trends and emerging talents.
