Center-South Brazil H2 August sugar production expected to increase 0.5% on year: survey

Sugar production in the key Center-South Brazil region is expected to total 2.948 million mt in the second half of August, up 0.5% year on year, an S&P Global Platts survey of 10 analysts showed Sept. 9.

Of the analysts surveyed, the cane crush estimate ranged from 36.8 million mt to 45.7 million mt. The average estimate was for a total cane crush of 43.5 million mt, a 3.0% increase year on year.

"The pace of the cane crush remains very strong and there is a high possibility for an abrupt end to the harvest as early as H1 or H2 November," said S&P Global Platts Analytics.

The proportion of cane used for sugar production is expected to be 46.3%, down from 46.7% 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 18.03 cents/lb on Sept. 9. The October NY11 sugar futures contract settled Sept. 9 at 19.24 cents/lb, providing a 1.21 cent/lb premium to hydrous ethanol in raw sugar equivalent.

Recoverable sugar per ton of sugar cane, or ATR, is expected to be 153.8 kg/mt, a decrease of 1.4% year on year.

"The H1 August UNICA report did not bring any surprises to the market," said Platts Analytics. "Our expectations for the 2H August UNICA report are to have more clarity about the third frost impact and if there is further downside to our cane crush forecast, which currently stands at 522 million mt."

Total ethanol output from sugar cane is expected to be 2.26 billion liters, an increase of 3.7% year on year.

Hydrous ethanol output from cane was expected to be 1.25 billion liters, according to the average of the analysts' responses to the survey. This would be a decrease of 13.1% year on year. Anhydrous ethanol output from cane in H2 August was expected to be 893 million liters, an increase of 40.8% year on year, according to the survey.

Total ethanol output from corn is expected to be 134 million liters, an increase of 18.6% year on year. Hydrous ethanol output was expected to be 86 million liters, an increase of 0.0% year on year, and anhydrous ethanol output in H2 August was expected to be 48 million liters, an increase of 80.9% year on year.

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