Over time the production and millage of sugarcane in Brazil has gained importance in different states. Historically sugarcane production was concentrated in the northeast, eastern coastal regions, and São Paulo. Even though São Paulo has remained the definitive leader in sugarcane millage between 1980 and 2015, there have been a few interesting developments.
Certain states in the Center-West (Centro-Oeste), Southeast (Sudeste), and South (Sul) have become more important in the millage of sugarcane.
The Programa Nacional do Álcool was implemented in 1975. It is generally believed that this served as an impetus for increased sugarcane production, and subsequently, sugarcane millage.
For the first part of the analysis, I used data collected by the União da Indústria de Cana-de-Açúcar (UNICA). UNICA is known as the Brazilian Sugarcane Industry Association in English. I was particularly interested in seeing how the millage production increased between 1980 and 2015 in the following states: Goiás, Mato Grosso, Mato Grosso do Sul, Minas Gerais, Paraná, and Rio de Janeiro.
I choose not to include the state of São Paulo in the analysis. During the time period, São Paulo remained the dominant miller of sugarcane in the country, accounting for over half of the national production. Even though the Paulista millage of sugarcane increased by an impressive 271,813 thousand tons between the harvests of 1980/1981 and 2014/2015, the overall national millage percentage captured by the state rose only 0.13% over 25 years.
In more concrete numbers, São Paulo milled 65,967 thousand tons of sugarcane out of a national total of 123,681 thousand tons for the 1980/1981 harvest. Following the 2014/2015 harvest, São Paulo milled 337,780 thousand tons of a national total of 632,127 thousand tons.
São Paulo is clearly the key player, but I am interested in identifying states that were once insignificant players in the millage of sugarcane in 1980 that have since captured a larger share of the market. Including São Paulo in the graphs would have not allowed us to clearly see the significant divergences that occurred between other states.
Here is a table showing the winners and losers of the national millage of sugarcane.
The states for the analysis are highlighted in light blue. The main sugarcane millage losers are highlighted in yellow. Negative ratio differences for state millage production over the national millage production during the time period are shown by highlighted red cells.
As you can see, Rio de Janeiro is included within the cohort of six states, yet its share of national millage production decreased during the 25 years.
Below are two more graphs. The first shows the gradual decline of relevance of Rio de Janeiro in the cohort. By the late 1980’s Paraná emerges as the leader of the pack, but falls to second place during the harvest of 2009/2010 to Minas Gerais. Paraná falls to third place during the harvest of 2010/2011 assuming its place after Goiás. Mato Grosso do Sul seems poised to overtake Paraná’s third place position in the near future.
The next graph shows the same data in a different way. We see what percentage of millage each state captured out of the total millage for only these six states (as opposed to the national total). Goiás captures a remarkable market share from its peers. In contrast, Rio’s fall is just as pronounced. Data for Mato Grosso do Sul seems to be missing until the harvest of 1984/1985. Possibly data for the state was still maintained by Mato Grosso for a few years after the later state’s “desmembramento”.
After seeing the changes at the state level, I wanted to analyze the changes at the municipal level. I used a report produced by the Conjuntura Econômica Goiana in 2012 written by four authors. This report was titled “Produção e preço de cana-de-açúcar em Goiás”.
This report does not measure the sugarcane millage, but rather how the price of the commodity effects the decision to produce it. I plan on reading this report in detail, but now I want to focus on a few areas.
Portions of the Brazilian savanna (cerrado) were previously not used to cultivate sugarcane. Over time the agricultural frontier has expanded into different portions of Goiás.
The authors claim that Goiás benefited from certain advantages:
- Farming costs are relatively lower;
- The harvest is almost entirely mechanized;
- High technological investments were made;
- The sugarcane crop varieties chosen are relatively more productive;
- Land prices are relatively low.
If valid, these advantages may shed light over why the millage in certain states stagnated or declined, while the millage in others has increased.
It is not necessarily true that sugarcane is harvested close to the location it is milled. However, there has been an increase in the amount of sugar mills in Goiás to accompany the increased production. The association will be analyzed in the next blog post.
The authors included two maps of the production of sugarcane in the state. The two maps depict the production of sugarcane in 2000 and 2010 respectively. Sugar production is measured in thousand tons. In 2000, there were 11 sugar mills which increased to 36 in 2010. This number does not include the 15 additional sugar mills that were still under construction.
The key for the sugar production remained consistent between the two maps. Production increased most dramatically in the south and southwest portions of the state.
Below are two maps showing the changes of sugarcane production in Goiás between 2000 and 2010.