Sugar production in the first half of November in Brazil's key Center-South region is expected to total 1,134 thousand mt, a spike of 43% year on year, according to the consensus expectations of analysts surveyed by S&P Global Platts Nov. 25.
If analyst estimates prove to be right, this would be the highest volume of sugar produced in any H1 November since the CS crop 2017-18, when 1,255 thousand mt was produced.
Considering the expected amount to be produced during the first two weeks of November, the cumulative production since April 1 might reach 37.54 million mt, an increase of 44% on year.
The amount of sugarcane crushed in H1 November is expected to total 17.91 million mt, down 9.9% from the prior year period, according to the survey. If the number is confirmed, the volume will be the smallest since the 2007-08 crop, when 17.53 million mt was crushed in the same period.
Due to the dry weather, the cane harvest in CS has progressed at a faster pace than in the prior year, reflecting the small volume left in land for the last months of the year.
If this forecast proves to be right, the cumulative cane crush of the 2020-21 crop will be up to 582.82 million mt.
Considering the total cane crush estimated by Platts Analytics at 600 million mt, this cumulative number would represent 97.14% of the crop already harvested.
Of the 10 analysts surveyed, the cane crush estimate ranged from 16.4 million mt to 20.3 million mt.
Industry association UNICA will release its official production figures on Nov. 25 at 11 am Sao Paulo time.
The analysts surveyed by Platts expect an average of two days of crushing stoppages in the analyzed period, which were mostly attributed to rain.
Cane's total recoverable sugar (ATR) is expected to rise to 149.3 kg/mt from 147 kg/mt in H1 November 2019; if confirmed the ATR could be the highest for the same period since the 2007-08 crop.
The proportion of cane used for sugar production in CS Brazil in H1 November is expected to surge to 42.23% from 28.38% a year earlier, according to the survey. The larger share of cane being converted for sugar production during the whole crop was due to higher export sugar prices compared with domestic ethanol.
Platts assessed hydrous ethanol converted in raw sugar equivalent at 11.82 cents/lb on Nov. 24, while the ICE NY11 sugar futures market settled at 15.04 cents/lb, pointing to an export premium of 3.22 cents/lb, or $70.99/mt, to domestic hydrous ethanol.
With the recent depreciation of the real, Brazilian sugar exports would receive a premium of roughly Real 382/mt compared with the spot ethanol market.
As the ethanol mix is expected to fall dramatically to 57.77% from 71.61% in the year-ago period, the total volume of cane ethanol produced is expected to fall 25.3% on the year to 920 million liters.
Production of hydrous ethanol -- used as a standalone E100 biofuel in Brazil -- is expected to fall 35.3% year on year to 532 million liters in H1 November, while anhydrous ethanol output during the period is expected to reach 388 million liters, a cut of 5.3%.
Anhydrous is used at a mandatory blending rate of 27% in Brazilian gasoline and the tight inventories in the country have been encouraging producers to shift a higher proportion of the total ethanol production to anhydrous.
