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Fires in cane fields could impact next Brazil sugar season, says group

09/23/2020 | 02:53pm

SAO PAULO/NEW YORK, Sept 23 (Reuters) - A series of fires hitting cane fields in Brazil's center-south region are unlikely to change the outlook for sugar production in the current season, but could impact next year's season, cane industry group Unica said on Wednesday.

Traders and analysts have cited the fires and the excessive dry weather in Brazil as one of the factors supporting sugar prices' rise in the latest sessions in New York.

"The main concern relates to fires occurring in areas that have already been harvested," said Unica's technical director Antonio de Padua Rodrigues, referring to fields where cane has been cut and the plants were starting to grow again for the 2021 crop.

Brazil central areas are seeing the second consecutive year of below-average rains. The excessive dryness has led to a large number of fires, both in forested areas and in agricultural fields.

According to the Agricultural Weather accumulative precipitation Dashboard on Refinitiv's Eikon terminal, in the main cane area of Ribeirao Preto, for example, is at 13.5 millimeters (0.53 inch) since the beginning of August, compared to 120 millimeters of normal average for the period.

A U.S.-based sugar broker said that despite the problems, it seems too early to consider damages for next season.

"I asked some large producers in Brazil about the dry weather, and they told me: Call me back in November," he said.

Another sugar broker in London said the news out of Brazil seemed to be "exaggerated."

The rainy season from October could regenerate the crops, but fields that were hit by the fires will need to be replanted, said Matheus Costa, sugar analyst at broker StoneX.

"It is difficult to have a precise evaluation for now. But there are risks for future production in some areas," he said.

(Reporting by Marcelo Teixeira; Editing by Sandra Maler)

© Thomson Reuters 2020
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