Porto Alegre, April 25th, 2022 – Updated figures show moderate advances in the Gross Production Value (GPV) of cane due to the increase in sugar prices in the foreign market. April must have new gains for cane due to significant highs in ethanol in the physical market. The most recent data from the Ministry of Agriculture (MAPA) on cane GPV show new growth for the crop year over year and in the margin. YoY gains reach 28%, with the value of BRL 119 billion in 2022 contrasting with last year’s BRL 92 billion. However, in the margin, between February and March this year, advances were more moderate, going from BRL 117.62 to 119.06 billion, with an increase of 1.22% in the adjustment between what was expected in February this year and what is now expected in March 2022. SAFRAS & Mercado, still in the previous month, when the cane GPV had been stable at around BRL 117 billion, already anticipated a rise in the cane GPV. Our estimate fluctuates by BRL 150 billion at the end of 2022, while the recent change from BRL 117 to 119 billion only reaffirms this trend, stemming from sugar gains in the foreign market, through the New York Stock Exchange.
In addition, for April this year, SAFRAS & Mercado expects new highs in the GPV of cane due to the effects of strong gains of hydrated ethanol in the physical market, which started the month at BRL 4.10 a liter and is now hovering around BRL 4.60 in São Paulo. At the other end, sugar in New York and the physical market has been firm relative to its recent short-term highs reached in April. Therefore, the cane GPV in April must easily surpass levels above BRL 120 billion, with potential to reach BRL 122 billion given the gains of hydrated ethanol in the physical market.
Moreover, the higher volume of cane in the 2022/23 new crop will also allow for the growth of GPV, in the same way that the reference prices continue to form a bullish vector in this indicator for both sugar and ethanol. With this, SAFRAS & Mercado reaffirms its estimate for the cane GPV of around BRL 150 billion for the end of 2022.
The GPV of grain crops also had strong growth in the margin, going from BRL 816 to 878 billion, up 7.58% between February and March this year, or BRL 61.9 billion. Once again, we can observe the participation of cane in grain crops remaining around 13%, as both cane and the total of crops have risen. The same can be said of the total GPV of agribusiness, which went from BRL 1.20 to 1.22 trillion, advancing 1.9% in the margin or BRL 23 billion. Regarding cane, the MAPA is succinct in its comments, only classifying it as an integral part of commodities, amid those with the best performance in terms of GPV, along with cotton, banana, coffee, wheat, and corn. Like cane, all crops with an increase in GPV in March have this movement attributed to the higher prices and larger quantities in the new crops of 2022. On the negative side, we have crops such as soybeans and rice with declines in both prices and production volume this year, according to the MAPA.