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The International Sugar Organization and Datagro Consulting came together at the legendary Waldorf Astoria on May 16, 2012 for their sixth annual New York Sugar Conference. Hundreds of participants gathered together in the Starlight Roof for the full day event of discussions and presentations, all pertaining to the global sugar industry. This annual conference serves as one of the most important platforms in the sugar business where people from around the world have the chance to share and highlight current information on the production, consumption, and trade of sugar and ethanol.
A main focus on this year’s New York Sugar Conference was the obstacles the industry is currently facing, as the demand for sugar and ethanol are increasing. While the industry is constantly trying to create more sustainable measures of planting and harvesting sugar cane, the future of government relations are at times uncertain, having an impact on global sugar companies. As the world economy has changed over the last few years, the cost for sugar production has increased, also affecting the international market.
The conference kicked off with a speech from distinguished speaker Dr. Plinio Nastari, President of Datagro a world leader as a consultancy company that focuses on sugar and ethanol. As Brazil sits atop the international platform as the world’s largest sugar producer, Dr. Nastari focused his speech on the current state of Brazil’s production and went through a deep discussion of when Brazil will be ready for another expansion spree.
Dr. Nastari highlighted a few key aspects that have been affecting Brazil’s sugar cane sector in recent times. New technological advances in machinery have changed the production systems in Brazil’s sugar cane industry, which leads to higher costs for the companies, as well as higher losses. The financial crisis in 2008 to 2009 created a reduced rhythm in cane reform. The overall economy of the world has been affected, and the sugar industry was not spared. Dr. Nastari discussed how the rising costs of cutting, loading, and transporting sugar has changed, all of which have impacted Brazil’s cane sector.
Brazil’s natural environment plays a great role in providing an ideal setting for sugar cane growth, but has also posed as an issue. In 2009, Brazil suffered from excessive rains. During the following year of 2010 there was a long drought that stretched into 2011, which was then accompanied by frost. Although not fully developed, the canes had to be harvested prematurely. Pests and diseases such as orange rust and migdolus fryanus have also infested some of Brazil’s sugar cane.
Although there were many obstacles, Brazil produced 558.35 million tons in cane production in 2011 to 2012. Dr. Nastari estimated a growth of production in the upcoming year of 562.60 million tons of cane, signifying a continuous growth in the Brazilian industry. In 2011 to 2012, Brazil’s sugar production stood at 35.88 million tons. Of that, 11.35 million tons were consumed domestically, while 24.19 million tons were exported.
Ethanol is a main component in Brazil as well. There are currently 118 plants in Brazil that are accredited by U.S. EPA as suppliers of Advanced Bioethanol, as well as 15 installations that are certified by Bonsucro to supply sugar and ethanol to the EU. Dr. Nastari stated that “demand for ethanol exports to the US is mounting.” Last year, Brazil produced 22.63 billion liters of ethanol. Of that, 22.35 billion liters were used domestically, and 1.92 billion liters were exported.
“If sugar prices weaken from additional world production, Brazilian producers may choose to produce more anhydrous ethanol, for the domestic and export markets,” said Dr. Nastari.
While Dr. Nastari pointed out the short term challenges Brazil faces with their sugar planting and harvesting, he remained very optimistic on the future of the industry. Like many other countries, Brazil wants to find sustainable ways of production. Dr. Nastari stated that the potential is great but it comes with costs. He believes that future expansion is very likely to happen, keeping Brazil as a main player in producing sugar.