Center-South Brazil H2 June sugar production increased 17.8% on year: survey

Sao Paulo — Sugar production in Brazil's key Center-South region is expected to total 2.605 million mt in the second half of June, an increase of 17.8% year on year, an S&P Global Platts survey of 11 analysts showed July 8.

Weather in the Center-South was favorable for crushing during H2 June, with an estimated 1.4 days lost to rain and about 255-265 mills active as of July 1.

The proportion of cane used for sugar production is expected to be 47.59%, up from 37.06% a year earlier. Brazilian producers are expected to continue to maximize their sugar output, given the increased profitability of sugar production compared with ethanol production.

"Mills in the Center-South will continue to maximize their sugar mix in the near term because sugar production is paying much better than ethanol production and the demand for ethanol remains subdued because of the spread of the coronavirus in Brazil," said a Sao Paulo-based trader.

Platts assessed hydrous ethanol ex-mill Ribeirao Preto converted into raw sugar equivalent at 9.49 cents/lb on July 7. The October NY11 sugar futures contract settled at 12.18 cents/lb on July 7, for a 2.69 cents/lb premium to hydrous ethanol in raw sugar equivalent.

Recoverable sugar per ton of sugar cane, or ATR, is expected to be 138.8 kg/mt for the period, an increase of 3.1% year on year.

Of the 11 analysts surveyed, the two largest producers estimated the total cane crush would be 42 million mt.

Total ethanol output from sugar cane is expected to be 1.797 billion liters, a decrease of 22.5% year on year.

Hydrous ethanol output was expected to be 1.207 billion liters, according to the average of the analysts' responses to the survey, for a decrease of 20.7% year on year. Anhydrous ethanol output in H2 June was expected to be 591 million liters, a decrease of 25.8% year on year.