CS Brazil H2 May sugar production expected to drop 18% on year: survey

Sugar production in the key Center-South Brazil region is expected to total 2.17 million mt in the second half of May, a decrease of 18.2% on the year, an S&P Global Commodity Insights survey of 10 analysts showed June 8.

Of the analysts surveyed, the cane crush estimate ranged from 37.3 million mt to 43.3 million mt. The average estimate was for a total cane crush of 41.6 million mt, a 4.8% drop on the year.

Weather in the Center-South was favorable for crushing during H2 May, with less than one day expected lost to rain and about 245-255 mills active as of June 1.

"With the majority of mills running in H2 May, the biweekly sugarcane crush is expected to be in line with previous years, but on a cumulative basis the crush should still be lagging previous crops," a Platts Analytics report said. "Moreover, the market is awaiting any insights into any changes to the sugar mix and to the tons of cane per hectare (TCH) during May."

The proportion of cane used for sugar production is expected to be 42.4%, down from 46.2% a year earlier. Brazilian producers had taken 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 ex-CBIOs was at 18.79 cents/lb on June 7, according to S&P Global data. The July NY11 sugar futures contract settled June 7 at 18.97 cents/lb, an 0.18 cent/lb premium to the hydrous ethanol price expressed in raw sugar equivalent ex-CBIOs.

Recoverable sugar per ton of sugar cane, or ATR, is expected to be 129.0 kg/mt, a decrease of 6.3% on the year.

Total ethanol output from sugar cane is expected to be 1.95 billion liters in H2 May, down 3.4% on the year.

Hydrous ethanol output was expected to be 1.26 billion liters, according to the average of the analysts' responses to the survey. This would be an increase of 3.5% on the year. Anhydrous ethanol output in H2 May was expected to be 690 million liters, 14.0% lower on the year, according to the survey.

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

CS Brazil Cane Production Data – H2 May 2022 (as of June 1)

*corn ethanol included

Sources: S&P Global Commodity Insights Pre-Report Survey of Analysts Results, UNICA.

**Year-on-year change compares S&P Global Commodity Insights Survey against UNICA's figures for 2021-22