CS Brazil H1 Sep sugar production expected to drop 16.7% on year: survey

Sugar production in the key Center-South Brazil region is expected to total 2.671 million mt in the first half of September, down 16.7% on the year, a survey of 10 analysts by S&P Global Platts showed Sept. 21.

According to the analysts surveyed, the cane crush is estimated to range from 34.8 million mt to 42.4 million mt. The average estimate was for a total cane crush of 38.8 million mt, a 13.2% decrease on the year.

"The cane crush will probably show signs of deceleration in the first half of September because of expectations that a few mills have already stopped production for the crop year," an analyst at S&P Global Platts Analytics said.

The proportion of cane used for sugar production is expected to be 46.1%, down from 47.3% 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 18.51 cents/lb on Sept. 21. The October NY11 sugar futures contract settled Sept. 21 at 18.97 cents/lb, providing a 0.46 cent/lb premium to hydrous ethanol in raw sugar equivalent.

Recoverable sugar per ton of sugar cane, or ATR, is expected to be 157.1 kg/mt, a decrease of 1.2% year on year.

"UNICA's August data did not bring any surprises to the market, but September might have a few surprises if mills start shutting down early for the crop year," said Platts Analytics.

Total ethanol output from sugar cane is expected to be 2.07 billion liters, a decrease of 10.8% year on year.

Hydrous ethanol output from cane was expected to be 1.12 billion liters, according to the average of the analysts' responses to the survey. This would be a decrease of 25.2% year on year. Anhydrous ethanol output from cane in H1 September was expected to be 820 million liters, an increase of 16.4% year on year, according to the survey.

Total ethanol output from corn is expected to be 130 million liters, an increase of 7.4% year on year. Hydrous ethanol output was expected to be 89 million liters, an increase of 18.5% year on year, and anhydrous ethanol output in H1 September was expected to be 41 million liters, a decrease of 10.4% year on year.

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

CS Brazil Cane Production Data – 1H September 2021 (as of September 16)

*corn ethanol excluded; **Year-on-year change compares S&P Global Platts Survey against UNICA's figures for 2020-21

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