Brazil sugarcane growers hit wall as ferts surge

01 July 2008 22:46  [Source: ICIS news]

PIRACICABA, Brazil (ICIS news)--Brazilian sugarcane growers are being squeezed by a surge in the cost of fertilizers and the low price ethanol makers are paying for the feedstock, sugarcane growers association Coplacana said on Tuesday.

“The price of fertilizers in Brazil has soared by 140% in the last 12 months along with a jump in international prices for the product,” said Coplacana president Jose Coral during an industry event in Piracicaba, Brazil.

Brazil is a major importer of fertilizers.

Coral also blamed under-priced ethanol mill prices in Brazil for keeping feedstock sugarcane prices suppressed.

 “It costs about Brazilian reais (R) 50 ($31.3) to produce one tonne of sugarcane, and farmers are only getting R32/tonne for the feedstock,” he said.

According to Coral, ethanol prices are down due to a supply and demand issue, stemming from a jump in Brazilian ethanol production this year that has outpaced local demand for the biofuel.

However, the Coplacana official said the situation for sugarcane growers was unsustainable and that Brazil could end up with a shortage of ethanol in 2009 due to a lack of feedstock.

About half of Brazil’s sugarcane crop is used by the ethanol industry.

Coral said it is unlikely that Brazil will produce 500m tonnes of sugarcane in 2007-08 as originally projected by the industry earlier this year.

($1 = R1.60)

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By: William Lemos
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