Brazilian ethanol production from Center-South reaches 33.2 billion liters for 2019-20 crop, the highest historical volume

Santos — Brazilian producers optimized their industrial capacity in the 2019-20 crop to produce a record high volume of ethanol at 33.24 billion liters, up 7.40% from the prior crop year, when the industry started to optimize ethanol production, industry association UNICA data showed Monday.

Of that total,corn-based ethanol production was 1.62 billion liters, a surge of 104% on year. Corn ethanol production also delivered the highest volume ever produced in Brazil with this feedstock

From the total ethanol produced, 9.94 billion liters were diverted to anhydrous ethanol and 23.30 billion liters to the Brazilian standalone biofuel hydrous ethanol, E100.

Brazil's Center-South, which is a key global sugar and ethanol producing region, ended the 2019-20 crop cycle on March 31 with a total of 589.90 million mt of sugarcane crushed, up 3% on the year, according to UNICA.

From the total cane crushed between April 1, 2019, and March 31, 2020, just 34.32% was diverted toward sugar production and 26.73 million mt of sugar were produced, similar to the prior crop year, when 26.51 million mt were produced, and when the sugar mix was 35.21%.

During the crop year, 267 mills were active in Center-South Brazil.

ETHANOL SALES REPORTED BY MILLS

Ethanol sales reported by CS mills in March reached 2.30 billion liters, down 12.94% from the prior crop. From the total production 148 million liters were exported and 2.15 billion liters were diverted to the domestic market, UNICA data showed.

In the domestic market, hydrous ethanol sales were at 1.37 billion liters, down 23.39% on month and drop of 17.75% from March 2018, when 1.67 billion liters were traded by mills.

Even with a sales drop, the number was still higher than the expected by some market participants, who were expecting a reduction of nearly 50%. The lower biofuel sales was expected due to the social distancing measures imposed by all Brazilian cities, and mainly Sao Paulo, which is the Brazilian city with the highest number of people infected with coronavirus and also Brazil's largest fuel-consuming city.

In the anhydrous ethanol market, while in the first 15 days of March sales increased 5.36% on year due to lower gasoline price for consumers, in the last two weeks, sales dropped 12.97%, with less than 400 million liters traded by mills. March total sales were 774.85 million liters, down 4.78% on year.

Anhydrous ethanol is used in Brazil in a mandatory blend of 27% in the gasoline C, which is the Brazilian specification.

In the whole crop period, hydrous ethanol sales reached 22.35 billion liters, surpassing by 7.02% the prior crop volume. This higher sale is explained by the most competitive price over the competitor gasoline C for Brazilian consumers.

In Southeast region, which has a 66% share of the Brazilian hydrous ethanol sales, the biofuel price parity for the 2019-20 crop was on average 65.40% of fossil fuel. Hydrous offers an economic advantage over the fossil fuel when its price is under the 70% threshold, due to the lower energy content.