Sao Paulo — The amount of sugarcane crushed in the first half of April in Brazil's key Center-South region is expected to be 16.5 million mt, down 26% year on year, an S&P Global Platts survey of analysts found Monday.
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Within the 11 analysts surveyed, two producing houses were estimating total cane crush to reach near 13 million mt, while the overall analysts' wide range was 13 million-21 million mt.
Industry association UNICA is expected to release its official production figures this week.
Analysts surveyed by Platts expected an average of 4.2 days lost to rain.
"The new season has started in CS Brazil with broadly similar conditions and parameters to last year apart from the slightly wetter weather. We therefore expect 3.3 days lost to rain and less mills active than last year," said Claudiu Covrig, senior sugar analyst with Platts Analytics.
| CS Brazil Cane Production Data – H1 April 2019 (as of April 16) | |||||||
| Category | Unit | Survey | Platts | UNICA (2018-19) | Y-O-Y** | var. Vol. y-o-y** | |
| Cane crush | (million mt) | 16.50 | 18.00 | 22.36 | -26.2% | -5.86 | |
| ATR | (kg/mt cane) | 105.70 | 106 | 106.68 | -0.9% | -0.98 | |
| Sugar output | (thousand mt) | 436 | 545 | 713 | -38.8% | -277.00 | |
| Ethanol total | (million ltr) | 823 | 793 | 998 | * | -17.5% | -175.00 |
| Hydrous output | (million ltr) | 699 | 690 | 843 | * | -17.1% | -144.00 |
| Anhydrous output | (million ltr) | 124 | 103 | 128 | * | -3.1% | -4.00 |
| Sugar Mix | (%) | 26.00 | 30.00 | 31.35 | -17.1% | -5.35 | |
| Ethanol Mix | (%) | 74.00 | 70.00 | 68.65 | 7.8% | 5.35 | |
| *corn ethanol excluded | |||||||
| Sources: S&P Global Platts Pre-Report Survey of Analysts Results, S&P Global Platts Analytics, UNICA. | |||||||
| **Year-on-year change compares S&P Global Platts Survey against UNICA's figures for 2018-19 | |||||||
The cane's total recoverable sugar (ATR) was expected to be similar to the prior year at 105.7 kg/mt, down from 106.68 kg/mt in the first 15 days of April 2018. From the analysts surveyed by Platts, the range was between 100 kg/mt and 110.4 kg/mt.
The proportion of cane used for sugar production in the Center-South in H1 April was expected to have further decreased to 26%, a drop of 5.3 percentage points in comparison with the first 15 days of crop 2018-19, the survey showed. It would also be steeply lower than the 42.4% registered in the year-ago period.
That would be a new record-low sugar mix for any H1 April period. The previous lowest mix for the same period was at 29.2% in crop year 2013-14.
As a result, sugar production was expected to total 436,000 mt in H1 April, a plunge of 39% year on year and the lowest produced volume since crop 2015-16 when 395,000 mt was produced in the same period.
"As ethanol pays better than sugar all along the curve and up to December we expect mills to maximize their ethanol production at the beginning of the season and even to readjust their sugar mix lower for the season if this situation continues," Covrig said. "A 2-percentage-point reduction in the sugar mix could mean 1.5 million mt less sugar on the market. Therefore, for H1 April we expect a sugar mix around 30% and sugar production close to 545,000 mt."
Hydrous ethanol output was estimated to reach 699 million liters, according to the average of the analysts' survey. Although more of the sugarcane is expected to be moved toward ethanol production compared with last year, hydrous output is expected to fall by 144 million liters in H1 April compared with the same period of the previous crop.
Anhydrous ethanol output in H1 April was expected to reach 124 million liters, marginally lower than 128 million liters produced in the prior year.
-- Nicolle Monteiro de Castro, nicolle.castro@spglobal.com
-- Edited by Jennifer Pedrick, newsdesk@spglobal.com