Brazil's Consecana-SP Update: 4.5% Adjustment Anticipated, Retroactive to 2024/25

Following a prolonged period of negotiations, marked by successive advancements and significant complexity, the Brazilian Sugarcane Industry Association (Unica) and the Organization of Sugarcane Producers Associations of Brazil (Orplana) have formally signed a Memorandum of Understanding. This MOU establishes the guidelines for updating Consecana-SP, the sugarcane pricing system in São Paulo state. The discussions highlighted the diverse range of contracts and business models between mills and suppliers, a factor that has historically complicated consensus-building within the sector. The document, signed on April 2nd, seeks to consolidate alignment between the industry and growers on central themes such as sugarcane remuneration, governance, and technical criteria. In practice, the understanding defines the parameters that will guide the elaboration of Consecana-SP's definitive instruments, which are still subject to validation by governance bodies. The calculation structure will remain based on Total Recoverable Sugar (ATR), maintaining the formula for the value per ton of sugarcane. This approach aims to preserve existing contracts and the legal certainty of relationships between parties. The primary alteration is the creation of a 4.5% adjustment factor specifically for growers. This adjustment is intended to function as a technical floor for contracts linked to the system, aiming to guarantee minimum remuneration when the calculated value falls below this level. For new contracts, the minimum value per ton will incorporate this additional amount. In Consecana standard contracts, ...