Between November and December, the Gross Production Value of cane increased by BRL 3.4 billion with new highs expected in the coming few months
Percentage growth in the margin for cane was 3.5%, while total GPV for crops increased 7.4%, and overall GPV for agriculture showed gains of 6.5% between November and December. The most recent data on the Gross Production Value of cane compiled by the Ministry of Agriculture (MAPA) show an approximation to the range of BRL 100 billion for 2023. The data, published in December, were compiled at current prices relative to November. Therefore, they do not show all the gains registered in the current bullish trend that both sugar in New York and hydrated ethanol in the physical market showed in December. Therefore, the cane GPV, currently estimated at BRL 99.31 billion for 2023, must rise again toward BRL 105 billion in the data to be disclosed in January.
Continuous gains in the month of December for raw sugar prices in New York, along with highs of hydrated ethanol in the physical market, must support these advances. In addition, during the first quarter of 2023, the cane GPV must see further advances not only due to higher current prices but also to the volume of cane expected for the next season, 2023/24. The heavy rains expected for January (300 to 330 mm over the Center-South cane fields] will lead to growth in the next cane crop, which is initially estimated at 565 mln tons by SAFRAS & Mercado but that may rise to 570 mln tons depending on the intensity of rains in February and March.
The devaluation of the real against the dollar expected for 2023 is also a factor that inflates domestic prices in reals and must contribute to further advances in the cane GPV next year. Despite this, the prospects for inflationary growth also expected for 2023 must reduce the gains in percentage terms relative to the previous year, although in nominal terms the advances will remain high. With this, the year 2023 must be marked by a GPV already at the level of BRL 120 billion for cane, following more slowly the advances of the general GPV of crops and the total agribusiness GPV, which respectively hit BRL 873 billion and BRL 1.25 trillion.