Sao Paulo — The sugar cane crush in the key Center-South Brazil region is expected to total 35.63 million mt in the first half of October, an increase of 39% year on year, an S&P Global Platts survey of analysts showed Wednesday.
Analysts' expectations are for an early end to the crushing season primarily due to dry weather which has led to a faster pace of harvesting than in previous seasons. The average estimate for days lost to rain during H1 October was one, much fewer than the estimated 5.7 a year earlier.
"With rains for H1 October reported at 21 mm, about 64.1% below norms, as measured by MDA Weather Services, we estimate about 1.6-1.7 days lost to rain this fortnight. This compares with 6-6.3 days lost in H1 October 2018," senior sugar analyst with S&P Global Platts Analytics Claudiu Covrig said.
The average estimate in the survey for sugar production was 1.731 million mt in H1 October, an increase of 54% year on year.
"We expect sugar production at 1.78 million mt in H1 October, down just 15,000 mt from H2 September and up 661,000 mt year on year. This should for the first time this year result in higher cumulative sugar production than the previous season. We therefore expect it at 23.58 million mt for April 1-October 15, up from 23.39 million mt recorded at the same time last year," Covrig said.
Recoverable sugar per metric ton of sugar cane, or ATR, is expected to be 154.0 kg/mt, an increase of 8.2% year on year
Of the 10 analysts surveyed, two large producers estimated the total cane crush would be between 37 million and 38 million mt.
The proportion of cane used for sugar production is expected to be 33.17%, up from 32.31% a year earlier. Brazilian producers are expected to continue to favor ethanol production over sugar, given the greater profitability of ethanol production over sugar production.
Platts assessed hydrous ethanol ex-mill Ribeirao Preto converted into raw sugar equivalent at 13.84 cents/lb Tuesday. The March New York No. 11 raw sugar futures contract settled Monday at 12.18 cents/lb, a 1.66 cents/lb discount to hydrous ethanol in raw sugar equivalent.
Total ethanol output from sugar cane is expected to be 2.193 billion liters, an increase of 50.9% year on year.
Hydrous ethanol output was expected to be 1.550 billion liters, according to the average of the analysts' responses to the survey. This would be an increase of 53.8% year on year. Anhydrous ethanol output in H1 October was expected to be 633 million liters, an increase of 42.2% year on year.
Strong consumer demand for hydrous ethanol at the pump has been supporting prices. The ethanol to gasoline price parity at the pump still favors ethanol consumption, especially in the larger states such as Sao Paulo. Platts assessed hydrous ethanol ex-mill Ribeirao Preto at Real 2,230/cu m Tuesday, 9.3% higher on the year.
-- Phillip Herring, firstname.lastname@example.org
-- Claudiu Covrig, email@example.com
-- Edited by Jonathan Dart, firstname.lastname@example.org