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

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

Highlights

Sugar's share of H1 Sep cane crush expected at 46.1%: analysts

H1 Sep anhydrous ethanol output seen up 16.4% 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.

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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)

Category Unit Survey Platts UNICA (2020-21) Y-O-Y** var. Vol. y-o-y**
Cane crush (million mt) 38.80 34.80 44.67 -13.1% -5.87
ATR (kg/mt cane) 157.10 155.00 159.00 -1.2% -1.90
Sugar output (thousand mt) 2,671 2,364 3,204 -16.7% -533.50
Ethanol total (million ltr) 1,939 1,838 2,200 * -11.9% -261.00
Hydrous output (million ltr) 1,119 1,090 1,496 * -25.2% -377.00
Anhydrous output (million ltr) 820 748 704 * 16.5% 116.00
Sugar Mix (%) 46.10 46.00 47.30 -2.5% -1.20
Ethanol Mix (%) 53.80 54.00 52.70 2.1% 1.10

*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.