CS Brazil H1 May sugar production expected to drop 30% on year: survey

Sugar production in the key Center-South Brazil region is expected to total 1,67 million mt in the first half of May, a decrease of 30.1% on the year, an S&P Global Commodity Insights survey of 11 analysts showed May 20.

Of the analysts surveyed, the cane crush estimate ranged from 33.3 million mt to 38.5 million mt. The average estimate was for a total cane crush of 35.6 million mt, a 14.1% drop on the year.

Weather in the Center-South was favorable for crushing during H1 May, with less than one day expected lost to rain and about 235-245 mills active as of May 16.

"The Center-South harvest is picking up pace, but still delayed when compared to last year," according to Platts Analytics. "Moreover, mills should divert more cane to ethanol production than the same period last year because ethanol has been more profitable than sugar since the start of the season."

The proportion of cane used for sugar production is expected to be 40.9%, down from 46.0% a year earlier. Brazilian producers were expected to take advantage of the recent high price of ethanol during the early stages of the harvest, but long-term expectations are for mills to maximize their sugar production during the second half of the harvest.

Platts assessed hydrous ethanol ex-mill Ribeirao Preto converted into raw sugar equivalent was at 20.27 cents/lb on May 19, according to S&P Global data. The July NY11 sugar futures contract settled May 19 at 19.77 cents/lb, a 0.50 cents/lb discount to the hydrous ethanol price expressed in raw sugar equivalent.

Recoverable sugar per ton of sugar cane, or ATR, is expected to be 122.3 kg/mt, a decrease of 7% on the year.

Total ethanol output from sugar cane is expected to be 1.58 billion liters, down 14.2% on the year.

Hydrous ethanol output was expected to be 1.09 billion liters, according to the average of the analysts' responses to the survey. This would be a decrease of 11.7% on the year. Anhydrous ethanol output in H1 May was expected to be 478 million liters, 20.7% lower on the year, according to the survey.

Industry association UNICA is expected to release its official production figures early next week.