Sugar output in Brazil’s Center South region, which is responsible for 90% of the country’s sugar production, fell by 12.5% in the second half of July to 2.24 million tons. This quick decline may be a sign of future lower sugarcane volumes because of drought, or could be a result of a delay in harvesting because of rains in the central regions of the country. Compared to the first half of July, cane processing in the previous period fell by 19% to 35.98 million tons which is believed to be a result of mills holding back cane in the belief that supplies will be tight toward the end of the season. Since the beginning of the season in April, total cane processing has equaled 280.4 million tons – up 3.8%, but yields have been much lower due to drought in the early part of the season. Despite these conditions in Brazil, investors are reluctant to bet on a price recovery because of high global supplies after four years of surpluses and a slowdown in Brazilian sugar exports.
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