Houston — The amount of sugarcane crushed in the first half of May in Brazil's key Center-South region is expected to be 37.5 million mt, down 12.4% year on year, an S&P Global Platts survey of analysts found Wednesday.
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The proportion of cane used for sugar production in the Center-South in H1 May was expected to be 33.2%, a decrease of 9% in comparison with the first 15 days of May in the 2018-19 crop, the survey showed.
"This decrease in the sugar mix ratio was due to two days of heavy rains which fell in most producing regions during the first two weeks in May," said an analyst from a large producer. "The heavy rains caused many mills to shut down and when mills came back online, the amount of hydrous ethanol produced ran at elevated levels."
Within the 10 analysts surveyed, two producing houses were estimating total cane crush to be near to 39.0 million mt, while the overall analysts' range was 34.0 million-39.6 million mt.
Industry association UNICA is expected to release its official production figures later this week if not early next week.
Analysts surveyed by Platts expected an average of 1.2 days lost to rain.
|CS Brazil Cane Production Data – 1H May 2019 (as of May 16)|
|Category||Unit||Survey||Platts||UNICA (2018-19)||Y-O-Y**||var. Vol. y-o-y**|
|Cane crush||(million mt)||37.50||38.40||42.78||-12.3%||-5.28|
|Sugar output||(thousand mt)||1,472||1,470||1,907||-22.8%||-435.00|
|Ethanol total||(million ltr)||1,801||1,849||2,051||*||-12.2%||-250.00|
|Hydrous output||(million ltr)||1,320||1,311||1,402||*||-5.8%||-82.00|
|Anhydrous output||(million ltr)||481||538||649||*||-25.9%||-168.00|
|*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|
Expectations for the cane's total recoverable sugar (ATR) of 120.8 kg/mt was 5.8% less than the previous year's ATR of 128.24 kg/mt in 1H May 2018. From the analysts surveyed by Platts, the range was between 117.0 kg/mt and 130.0 kg/mt.
Sugar production was expected to total 1.472 million mt in H1 May, a decrease of 23% year on year when 1.907 million mt was recorded in H1 May 2018.
"As ethanol continued to pay better than sugar for the period and hydrous demand remained strong, we expect mills to have continued to maximize their ethanol production. As a result, we expect a sugar mix of around 33%, down from 36.6% a year earlier but up from 30.8% in H2 April on drier weather and higher cane sucrose content," said Claudiu Covrig, senior sugar analyst with Platts Analytics. "We estimate a significant recovery in the ATR, up by 10.4 kg/mt from H2 April to 122 kg/mt, down 6.3 kg/mt on the year bringing sugar production for the period to 1.47 million mt, down 433,000 mt from a year earlier."
Hydrous ethanol output was estimated to reach 1.320 billion 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 83 million liters in H1 May compared with the same period of the previous crop.
Anhydrous ethanol output in H1 May was expected to reach 481 million liters, much lower than 649 million liters produced during the same time period in the prior year.
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