CS Brazil H2 November sugar production seen rising 38.9% on year: survey

New York — Sugar production in Brazil's Center-South is expected to total 483,000 mt in the second half of November, an increase of 38.9% on the year, an S&P Global Platts survey of 8 analysts showed Dec. 8.

Of the eight analysts surveyed, the two largest producers estimated the total cane crush would be between 6.4 million mt and 7.6 million mt. The total cane crush recorded in H2 November 2019 was 10.9 million mt.

"The reduction in the cane crush for H2 November was because more mills ended their season earlier compared to last year due to a faster pace of crushing." said a Sao Paulo-based trader.

An estimated 2.5 days were lost to rain in H2 November, and 50-55 mills were active as of Dec. 1, according to analysts' estimates.

"Mills continued to maximize sugar production in H2 November mainly due to better profitability of sugar against ethanol with the sugar premium over ethanol staying around 300 points for most of November," said another Sao Paulo-based trader. "Although, the sugar premium over ethanol in December is now closer to 200 points because of the recent strength in the Brazilian real."

Platts assessed hydrous ethanol ex-mill Ribeirao Preto converted into raw sugar equivalent at 12.40 cents/lb on Dec. 8. The March New York contract settled at 14.45 cents/lb on Dec. 8, meaning a 2.05 cents/lb premium to hydrous ethanol in raw sugar equivalent.

Recoverable sugar, or ATR, is expected to be 144.2 kg/mt, an increase of 8.2% year on year. Sufficient rainfall over the summer and consistently dry weather in CS Brazil since April 1 have allowed the cane to develop well and have a high sucrose concentration.

The proportion of cane used for sugar production is expected to be 38.3%, up from 23.7% a year earlier, according to analysts' estimates.

Total ethanol output from sugar cane during H2 November is expected to be 507 million liters, a decrease of 33% year on year.

Hydrous ethanol output was expected to be 293 million liters, according to the average of the analysts' responses to the survey. This would be a decrease of 27.6% year on year. Anhydrous ethanol output in H2 November was expected to be 215 million liters, a decrease of 22.8%.