The financial health of the plants improved in the 2020/21 harvest, and the scenario for the 2021/22 period is also positive, although there is still some imbalance in the sector.
For the 2022/23 harvest, one of the greatest challenges remains the weather. In addition, the costs of inputs and money will weigh heavily on the activity.
The forecasts are made by Itaú BBA analysts, who also highlight the volatility of the capital market and risk management for the period.
Good prices in the sector allowed the mills to obtain the best operating result in recent years, which resulted in good cash generation and a reduction in debt.
Total net revenues — taking 59 groups from the center-south as a base, and representing 60% of sugarcane crushing in 2020/21 — reached R$ 79.2 billion, with Ebitda (earnings before interest, taxes, depreciation and amortization ) of BRL 23.1 billion.
The net debt, which was BRL 50.7 billion in 2019/20, dropped to BRL 45.6 billion in the 2020/21 harvest.
According to analysts’ calculations, the crushing of sugarcane drops to 525 million tons this harvest, but rises to 545 million in the next.
The average ATR (Total Recoverable Sugar) dropped again in the 2022/23 harvest, reaching 143 kg per ton of cane, a 2.1% decrease compared to the 2021/22 harvest.
The distribution of sugarcane crushing between sugar and ethanol changes little in the next harvest. At present, 45.4% of the cane harvested was for sugar production. Next time, the percentage should be 45.2%.
Production rises, both sugar and fuel. According to Itaú BBA’s calculations, sugar production will be 32.5 million tons in this harvest and 32.9 million in the next.
In the same period, total ethanol production rose from 24.1 billion liters to 24.6 billion, an increase of 2%. In 2022/23, the mills are expected to supply the same amount of hydrated ethanol as this crop, estimated at 14.1 billion liters, but increase the supply of anhydrous ethanol to 10.5 billion, an increase of 4.8%.
The production of ethanol from corn maintains consistent growth. In the next harvest, production should reach 4 billion liters, with an evolution of 17.6% compared to what will be produced in 2021/22.
According to price monitoring by Cepea (Center for Advanced Studies in Applied Economics), the bag of sugar is being traded at R$ 156 in the state of São Paulo, a value 46% higher than a year ago.
Hydrous ethanol had an even greater evolution, rising 63% in the period. A liter of fuel is worth R$ 3.34 at the São Paulo mills.
Milk The producer received, this month, R$ 2.1210 per liter of milk delivered to the industry in November. The value is 3% lower than the previous month and accumulates a drop of 8.7% compared to December 2020, according to Cepea.
Still in high The average price this year is R$ 2.2481 per liter, with a real increase of 15.5%, compared to 2020. Due to a lower demand for dairy, the average prices paid to producers are on a downward trend in the last quarter of this year.
Profitability According to Cepea, 2021 will be marked by increases in the product in the field, but with low profitability for the producer. The same occurs with dairy products, which pay dearly for milk, but have difficulties in passing on prices to retailers due to the weak purchasing power of consumers.
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