CS Brazil H2 October sugar production expected to drop 59% on year: survey

Sugar production in the key Center-South Brazil region is expected to total 711,200 mt in the second half of October, down 59% on the year, a survey of 10 analysts by S&P Global Platts showed Nov. 8.

According to the analysts surveyed, the cane crush is estimated to range from 11.9 million mt to 17.8 million mt. The average estimate was for a total cane crush of 13.9 million mt, a 48.4% decrease on the year.

"The cane crush should show a decrease in H2 October from H1 October because more mills ended the season combined with heavy precipitation in the Center-South," an analyst at S&P Global Platts Analytics said. "The final few weeks of crushing activity will be focused on ethanol production because of mills guaranteeing ethanol supplies for the long intercrop season and the higher premium ethanol production is paying over sugar production."

Weather in the Center-South was suboptimal for crushing during H2 October, with an estimated five days lost to rain.

The proportion of cane used for sugar production is expected to be 36.2%, down from 43.5% a year earlier. Although mills had been taking advantage of the higher premium sugar production was paying for the majority of 2021, ethanol production is now paying a premium over sugar production.

Platts assessed hydrous ethanol ex-mill Ribeirao Preto converted into raw sugar equivalent at 20.61 cents/lb on Nov. 5. The March NY11 sugar futures contract settled Nov. 5 at 19.94 cents/lb, providing a 0.67 cent/lb discount to hydrous ethanol in raw sugar equivalent.

Recoverable sugar per ton of sugarcane, or ATR, is expected to be 148.2 kg/mt, a decrease of 4.7% year on year.

Total ethanol output from sugarcane is expected to be 838.9 million liters, a decrease of 44.6% year on year.

Hydrous ethanol output from cane was expected to be 455 million liters, according to the average of the analysts' responses to the survey. This would be a decrease of 47.9% year on year. Anhydrous ethanol output from cane in H2 October was expected to be 376 million liters, a decrease of 41% year on year, according to the survey.

Total ethanol output from corn is expected to be 144 million liters, an increase of 12.5% year on year. Hydrous ethanol output was expected to be 95 million liters, a decrease of 8.2% year on year, and anhydrous ethanol output in H2 October was expected to be 49 million liters, an increase of 96% year on year.

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