Center-South Brazil H1 July sugar production expected to decrease 2.6% on year: survey

Sugar production in the key Center-South Brazil region is expected to total 2.951 million mt in the first half of July, down 2.6% year on year, an S&P Global Platts survey of 10 analysts showed July 21.

Of the analysts surveyed, the cane crush estimate ranged from 42.3 million mt to 47.7 million mt. The average estimate was for a total cane crush of 45.2 million mt, a 3.3% drop year on year.

Weather in the Center-South region was favorable for crushing during H1 July, with an estimated 0.2 days lost to rain and about 259-265 mills active as of July 16.

The proportion of cane used for sugar production is expected to be 47.4%, down from 47.9% a year earlier. Although Brazilian producers were taking advantage of the recent high prices of hydrous and anhydrous ethanol, long-term expectations are for mills to continue to maximize their sugar production, given the increased profitability of sugar production over ethanol production.

Platts assessed hydrous ethanol ex-mill Ribeirao Preto converted into raw sugar equivalent at 16.89 cents/lb on July 20. The October NY11 sugar futures contract settled July 20 at 17.41 cents/lb, providing a 0.52 cent/lb premium to hydrous ethanol in raw sugar equivalent.

Recoverable sugar per ton of sugar cane, or ATR, is expected to be 145.0 kg/mt, an increase of 2.1% year on year.

Total ethanol output from sugar cane is expected to be 2.10 billion liters, an increase of 3.0% year on year.

Hydrous ethanol output was expected to be 1.24 billion liters, according to the average of the analysts' responses to the survey. This would be a decrease of 10.7% year on year. Anhydrous ethanol output in H1 July was expected to be 856 million liters, an increase of 32.7% year on year, according to the survey.

Total ethanol output from corn is expected to be 126 million liters, an increase of 27.3% year on year. Hydrous ethanol output was expected to be 81 million liters, an increase of 14.3% year on year, and anhydrous ethanol output in H1 July was expected to be 45 million liters, an increase of 60.2% year on year.

Industry association UNICA is expected to release its official production figures in the upcoming days.