Two of Brazil’s largest sugar and ethanol producers disclosed initial damage estimates from recent fires that devastated sugarcane fields in Sao Paulo state, the country’s leading sugar-producing region. The fires, which have been attributed to suspected arson, spread rapidly due to extremely dry conditions, affecting thousands of hectares of cane fields.
Raizen SA, Brazil’s largest sugar group, reported that approximately 1.8 million tons of sugarcane, including supplies from its partners, were impacted—about 2% of its expected 2024/25 crop. Despite this, Raizen stated it does not anticipate material losses, as it plans to prioritize the crushing of the affected sugarcane to mitigate negative effects. Sugar expert Caio Carvalho noted that while the burned cane can still be harvested, mills must act quickly, as the quality of the cane deteriorates shortly after burning.
Raizen resumed operations at its Santa Elisa mill after a brief shutdown due to the fires. As of Monday, Sao Paulo authorities reported no active fires in sugarcane fields, although many municipalities remained on high alert.
Another major producer, Sao Martinho, indicated that about 20,000 hectares of its sugarcane were affected. The company maintained its production guidance for 2024/25 but warned of reduced industrial efficiency in sugar conversion, estimating a loss of 110,000 tons of sugar, which would be offset by a proportional increase in ethanol production.
Sao Martinho also announced an additional investment of 70 million reais ($12.7 million) to enhance productivity in future harvests. Analysts from Citi expressed concerns that the drought and fires could negatively impact the next crop in 2025, as some burned fields had cane intended for the upcoming season. Brazil’s sugar and ethanol industry group, UNICA, plans to assess the situation in the affected fields in the coming days.