Brazil H2 April Center-South sugarcane crush expected at 26 mil mt: Platts survey


The sugarcane crush in Brazil's key Center-South region in the second half of April is expected to have been 26 million mt, down 28% year on year, but up 47% from the prior two weeks, an S&P Global Platts survey of analysts showed Wednesday.

Brazilian sugarcane growers association UNICA will release the official production figures for the Center-South region Thursday.

The 2017-18 sugarcane season started April 1 and will last until March 31 next year. Rains hampered sugarcane crushing in H2 April, while the number of units operational is expected to have been lower than last year as mills started crushing at slower pace. Last year, mills started the crushing activities early amid dry weather above average and due to the amount of cana bisada available, according to Platts agricultural unit Kingsman.

Analysts polled said about three days of crushing had been lost to rain.

The H2 April cane crush figure suggested in the survey would take the cumulative cane crush for total April to 43.66 million mt, down 37% from April 2016.

The range of analyst forecasts in the survey was 23.5 million-28 million mt, while the range for total recoverable sugar (ATR) was 111-114 kg/mt.

The survey expects ATR to be 112 kg/mt, down 10.41 kg/mt from a year ago, but up 5% from H1 April.

The survey showed the percentage of cane to produce sugar to come in at 42.25%, compared with 42.91% a year earlier.

Sugar production in H2 April is expected to have reached 1.17 million mt, down 35% from a year ago, but up 66% from H1 April.

Ethanol output is expected to have dropped 34% year on year to 985.5 million liters, but up 46% from H1, the survey showed.

Hydrous ethanol is likely to have accounted for 69% of total ethanol, or 680.5 million liters, while anhydrous accounted for the balance.

If the expectation for sugar and ethanol output proves correct, the cumulative production in the first month of the season would be 1.87 million mt of sugar, down 42% year on year, and 1.66 billion liters of ethanol, down 44% on the year.

Hydrous ethanol sales in 2H April to the domestic market for fuel and industrial usage, are expected to have reached roughly 650 million liters, analysts at Kingsman forecast. In H1 April, hydrous sales to the domestic market reached 460 million liters.

With the rise in production, hydrous prices declined at pump in some of the main consumer states of Center-South and consequently increased demand.

Kingsman expects hydrous fuel demand in Center-South to have reached 1.12 billion liters in April, up from 937 million liters in March.

Hydrous prices at pump in Sao Paulo averaged 70.6% of gasoline prices in April, compared with 72.5% the month before.

Hydrous fuel ethanol is used in flex-fuel vehicles and competes with gasoline at the pump, where it is competitive when its price is at most 70% of the gasoline price. Gasoline has 30% more energy content than its competitor hydrous.

Anhydrous is blended with gasoline at a ratio of 27%, according to the country's mandate.

Both products are also used in industry and exported.


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