SAO PAULO (Dow Jones)--Brazilian sugar and ethanol mills have canceled around 22% of orders for machinery and equipment purchases for 2008-09, according to research by Brazil's national center for the sugar and ethanol, or Ceise, said Monday.
Of 4.9 billion reals ($2.2 billion) worth of machinery and equipment orders for 2008-09 sugarcane crop season, 22% have been canceled and 28% have been postponed, said Flavio Vicari, executive director of Ceise.
"The global financial crisis and lack of credit from international and Brazilian banks has lead many mills to review their plans leading to cancellations of orders for machinery and equipment," he said.
Most of the delayed orders and cancellations relate to existing Brazilian mills that were upgrading their plants to undertake cogeneration activities, or new mills that intended to specialize in ethanol, Vicari
He said many of these mills have put their projects on hold, but should start to review these projects in 2010, when he expects the market to grow.
Brazil has around 380 sugar and ethanol mills. Brazil is the world's largest exporter of sugarcane-based ethanol.
-By Tony Danby; Dow Jones Newswires; 55-11-2847-4523; brazil@dowjones.com