North-Northeast Brazil sugarcane crush for the 2015-16 season totaled 37.03 million mt at end-December, down just 1% from the year-ago season, agriculture ministry data showed Tuesday.
Industry and market participants had estimated that the crushing will be at least 10% lower than last year.
The North-Northeast season starts in September and normally lasts until February, but can be extended until March depending on cane availability and weather. Platts agricultural unit expects the season to end this year in February.
So far this season sugar production amounted to 1.92 million mt, practically unchanged from 1.93 million mt produced same time last year. Ethanol output was up 11% at 1.64 billion liters. Of this total, anhydrous production amounted to 832 million liters, down 12% year on year while hydrous output totaled 809 million liters, up 53% year on year.
The cane mix toward sugar production was on average 41.48% this season with ethanol mix at 58.52%, from 44.15% and 55.85% last season, respectively.
The ATR, or total recoverable sugar, is on average 8.26 kg/mt higher than previous season at 130.96 kg/mt, calculations from Kingsman, agricultural unit of Platts shows. Kingsman points to while the drought have impacted the yields reducing the cane availability, on the other hand have also been improving the ATR.
Data from a crop survey done in November by a regional sugar industry association showed cane crush in North-Northeast Brazil was expected to drop minimum 10% to reach no more than 55 million mt, the association told Platts.
The total recoverable sugar (ATR) should be higher from last season, at roughly 128 kg/mt or even a bit better, according to the survey. This amount represent total sugar output at 3.3 million mt and 1.94 billion liters of ethanol, according to analysis by Platts agricultural unit Kingsman.
The drop is mainly due to severe drought in the region last year attributed to El Nino phenomenon. It rained only in June, July and December, according to Brazilian weather forecast Somar.
"I think the crushing will not surpass 54 million mt," a market participant said Tuesday. "There is no feedstock available and we should see a sudden death of the harvesting pretty soon. Some estimates are even seen as low as 49 million mt of cane crushed this season."
One producer source said some mills in northern Pernambuco state have already ceased operations this season due to a lack of cane.
