T
he future of the sugarcane sup-
ply chain in Brazil, which is on
the frontline of the sector in the
world, isdetermined tokeep this
leadership, in the perspective of
the projections for the segment. Forecasts
indicate growth both in raw material and
majorderivatives, sugar andethanol,which,
in turn, will also depend on investments
that need to be guaranteed for the activity.
In the document “Projections for Agri-
business 2016/17-2026/27”, the Ministry
of Agriculture, Livestock and Food Sup-
ply (Mapa), in a preliminary version of 25th
July 2017, estimates that sugar, a com-
modity at which Brazil is leading produc-
er and world’s leading exporter, will soar
17.6 percent in production, 21.3 percent in
consumption and 36.4 percent in exports,
throughout this period. On the productive
side, the document recalls the financial
crunches still faced by the sector and the
drop in the prices, which is supposed to fa-
vor the destination of sugarcane for the in-
dustry, for themanufacture of ethanol.
On the other hand, the most recent re-
port by theOrganization for Economic Coop-
eration and Development (OECD), linked to
the Food and Agriculture Organization of the
United Nations (FAO), on Agricultural Out-
look 2017-2026, expresses hope in the recov-
ery from the crisis faced over the past years
by the segment inBrazil. A sign that attests to
it is the effort in sugarcane field renewal, an-
ticipating this expansion. Still according to
what was projected by the Brazilian govern-
ment organ, sugarcane planting is supposed
to be expanded by 1.5 million hectares over
thedecade, comingonlyafter soybean.
As for ethanol, the document by the glob-
al organizations on Brazil foresees expressive
expansion in demand over the 10-year period
inquestion: this increase is estimated to reach
6 billion liters, representing 23 percent more
than the consumption registered in the Coun-
try in 2016. To this end, it takes it that Brazil’s
taxation systemwill be more favorable to hy-
dratedethanolratherthangasoline.Insidethe
government itself rumor has it that the sector
will be expanded greatly, with a special focus
onhydratedethanolsoldatgasstations.
At consultancy level, there is equally a
projection for an annual growth in the con-
sumption of sugarcane-based products. Ar-
cher Consulting, in the words of director Ar-
naldoCorrêa, released inJuly2017, foresees
soaring domestic and foreign demand for
sugar from38.9 to42.4million tonsbetween
the 2018/19 and2022/23 cropyears, and ris-
ingdemand for ethanol at home, wherehy-
drated ethanol prevails, soaring from 26.8
to 29.8 billion liters. This, he insisted, will
require an annual average 3.7 percent in-
crease in the production of sugarcane and
investments of over US$ 15 billion in new
mills during the period, which, in turn, will
depend on the public sector’s willingness
in ensuring the necessary security to the in-
vestments, throughwell-defined rules.
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