Sugar production in the first half of August in Brazil's key Center-South region is expected to total 3.249 million mt, a surge of 53% year on year, according to the consensus expectations of analysts surveyed by S&P Global Platts Aug. 24.
If analyst estimates prove to be right, this would be the highest volume of sugar produced in any H1 August on record.
Based on the expected production total for the first two weeks of August, cumulative output since April 1, would reach 22.97 million mt, an increase of 48.27% on year.
The amount of sugarcane crushed in the first half of August is expected to total 46.68 million mt, 8.9% more than in the prior year period, according to the survey.
If this forecast proves to be right, the cumulative cane crush of the 2020-21 crop will be up to 373.12 million mt.
Based on an annual cane crush estimate from S&P Global Platts Analytics of 600 million mt, this cumulative figure would indicate 62.19% of the crop had already been harvested. The fast crushing pace could potentially translate into an earlier end to the harvest, but not necessarily a sudden end, as producers will look to crush the whole volume of cane on their lands.
Market participants estimate the CS harvest could end by late October in many producing regions.
Of the 12 analysts surveyed, the cane crush forecast ranged from 44.9 million mt to 47.5 million mt.
Industry association UNICA is expected to release its official production figures in the coming days.
The analysts surveyed by Platts expect an average of less than half a day of crushing stoppages took place in the period under review, which was mostly attributed to dry weather.
The cane's total recoverable sugar (ATR) is expected to rise to 151.6 kg/mt from 146.1 kg/mt in H1 August 2019, but a little below the prior record for the period, which was 152.10kg/mt for the 2018-19 crop.
The proportion of cane used for sugar production in CS Brazil in H1 August is expected to surge to 48.16% from 35.68% in the year-ago period, according to the survey. The larger share of cane being converted for sugar production is due to higher export sugar prices compared with those in the domestic ethanol market.
Platts assessed hydrous ethanol converted in raw sugar equivalent at 10.00 cents/lb Aug. 21, while the ICE NY11 sugar futures market settled at 12.83 cents/lb, pointing to an export premium of 2.83 cents/lb, or $62.39/mt compared with domestic hydrous ethanol.
With the recent depreciation of the real, Brazilian sugar exports would receive a premium of roughly Real 349/mt compared with the spot ethanol market.
As the ethanol mix is expected to fall dramatically to 51.84% from 64.32% in the year-ago period, the total volume of ethanol produced from cane is expected to fall 7.6% on the year to 2.19 billion liters.
Production of hydrous ethanol -- used as a standalone E100 biofuel in Brazil -- is expected to fall 9.2% year on year to 1.50 billion liters in H1 August, while anhydrous ethanol output during the period is expected to reach 692 million liters, a decrease of 3.6%. Anhydrous ethanol is used at a mandatory blending rate of 27% in Brazilian gasoline.
