Sao Paulo — The amount of sugarcane crushed in the first half of September in Brazil's key Center-South region is expected to be 39.56 million mt, down 13% year on year and 8.7% lower than the previous two-week period, an S&P Global Platts survey of analysts found Monday.
Industry association UNICA will release its official production figures for the region on Tuesday at 10 am Sao Paulo time.
The lower volume of sugarcane crushed explained by sources as a result of the days lost to rains.
Analysts surveyed by Platts expect an average of 1.8 days lost to rain and maintenance. This compares with 1.5 days in H2 August.
If analysts' expectations were realized, the cumulative cane crush thus far this season (April 1-September 16) would reach 431.32 million mt, marginally up 0.7% year on year.
The cane's total recoverable sugar (ATR) is expected to increase 2kg/mt from the previous two weeks at 155.46 kg/mt. That figure would be down 1.69 kg/mt year on year. From the 10 analysts surveyed by Platts the range was between 153kg/mt to 158kg/mt.
The proportion of the cane used for sugar production in the Center-South in H1 September is expected to keep stable in comparison to the previous two weeks period at 37.73%, according to the survey; however, it would be well extremely lower than the 50.04% registered in the year-ago period.
Sugar mix kept breaking records of the lowest proportions since the CS crop 1997-98.
As a result, sugar production is expected to total 2.20 million mt in H1 September, a plunge of 35.3% year on year and 7% lower from H2 August.
Cumulative sugar production between April 1 and September 16 would reach 21.04 million mt, a shrink of 21.3% year on year.
Despite the lower sugar production in the world 's largest sugar producing region of Center-South Brazil, the international sugar price has kept a strong downward trend and plummeted 46 points Monday on the NY11 sugar futures market. Market participants attributed this to the largest-ever volume of sugar expected to be exported from India and technical movements four days before the October expiry in the NY11 market.
As more of the sugarcane is expected to continue to be used for ethanol production compared with last year, hydrous ethanol output in H1 September is expected to reach 1.52 billion liters. This would be up 25.5% from a year ago but down 8.2% from H2 August.
Based on the analyst survey, April 1-through-September 16 hydrous ethanol production would be 57.2% higher than the year-ago period at 15.49 billion liters.
Strong spot demand from distributors looking to replenish stocks has recently supported a spike in Platts' assessment of hydrous ethanol ex-mill Ribeirao Preto.
On Monday, Platts assessed hydrous at Real 2,090/cu m, up 2.45% from a week ago and up 10% from a month ago.
Ethanol in Brazil is used in two ways: hydrous ethanol is used as E100 fuel in flex-fuel vehicles and competes with gasoline at the pump when its price is 70% or less of the gasoline price, while anhydrous has a mandatory blend rate of 27% for gasoline.
