A total of 24.86 million mt of sugarcane was crushed in Center-South Brazil during the second half of October, down 2.9% from the first half of October, and down 17.53% from the year-ago period, according to data released by trade association UNICA Monday.
The volume crushed was about 1.01 million mt above market expectations, according to an S&P Global Platts survey of analysts released November 8.
Antonio de Padua Rodrigues, technical director at UNICA, said wet weather and a reduction in supply of sugarcane were responsible for the slow down in harvesting.
The cumulative amount of cane crushed so far this season is now up to 508.34 million mt, down 4.35% from 531.45 million mt in the year-ago period, according to UNICA.
The 2018-2019 sugarcane season began April 1 in the key Center-South region, the largest sugarcane and sugar producer in the world. However, chronic dry weather is widely expected to bring an early end to crushing, with the season seen closing a month to six weeks earlier than usual.
Some 53 mills have already ended crushing, below UNICA expectations of 81 mills ending their crushing by November 1. Another 79 mills are expected to stop crushing operations through November 15, UNICA said.
Total Recoverable Sugar (ATR) levels averaged 133.96 kg/mt of cane in H2 October, down 6% from H1 October and down 12.81% from the year-ago period. The H2 October level missed market expectations of 136.4 kg/mt of cane.
Unusually dry weather during the sugarcane season in the Center-South has bolstered the average ATR level since April 1 to 140.13 kg/mt, an increase of 1.73% on the year, according to UNICA.
Sugar production in Center-South Brazil in H2 October totaled 958,000 mt, down 14.31% from H1 October and down 49.35% from the year-ago period, UNICA said. Production during the period beat estimates of 953,000 mt.
Cumulative sugar production between April 1 and November 1 was 24.35 million mt, down 26.70% compared with crop year 2017-2018. The total beat the Platts survey estimate by 10,000 mt.
Brazilian mills have shifted production toward hydrous ethanol due to its greater profitability and strong sales. Hydrous ethanol output in H2 October totaled 955 million liters, down 6.56% from H1 October and up 7.11% from the year-ago period. The total topped analyst expectations of 919 million liters.
Cumulative hydrous ethanol output has risen 45.96% year on year, hitting 18.86 billion liters so far in crop year 2018-2019.
Anhydrous ethanol production in H2 October was 405 million liters, down 11.57% from H1 October, and down 37.4% compared with the year-ago period. Cumulative anhydrous production was up to 8.40 billion liters through November 1, down 13.75% year on year.
The proportion of mill output of ethanol compared with sugar rose to 69.82% from 67.83% in H1 October, while sugar production fell to 30.18% over the same period.
"The data reinforces the trend observed throughout the cycle in which businesses indicated a preference for ethanol production. If the mills had not changed the production mix, we would have registered an increase of 7.5 million mt in sugar production above our actual production" Rodrigues said.
The cumulative share for sugar and ethanol is now 35.87% sugar and 64.13% ethanol, with the share of ethanol production increasing 11.75 percentage points from the previous harvest, when 47.62% of cane went to sugar production and 52.38% to ethanol production.
Total ethanol sales reached 2.89 billion liters, of which 2.74 billion liters were sold domestically and 154.11 million liters were sold abroad, UNICA said.
Hydrous ethanol sales totaled 2.02 billion liters in H2 October, up 113.46% from H1 October, and 33.62% higher than the year-ago period. Of the H2 October volume, 950 million liters was exported, and 1.07 billion liters were sold domestically.
Anhydrous ethanol sales totaled 383.74 million liters, up 13.6% from H1 October, but down 13.53% from the year-ago period.
On a cumulative basis, overall ethanol sales from April 1 through November 1 totaled 17.82 billion liters, with 16.81 billion liters sold domestically and 1.01 billion liters exported, UNICA said.
