Brazilian sugar mills gear up for a big season
The Brazilian sugar harvest is picking up steam, data from the cane industry Body Unica showed.
By the end of the first half of April, 181 mills should be up and running in the country's centre-south cane belt. "At the end of March, 83 production units were in operation," Unica said.
And mills continue to favour sugar production over ethanol compared to last year, although there are signs of growing demand for the biofuel.
Rising sugar production
According to Unica data, sugar production in the region jumped to 270,000 tonnes in the second half of March, from 73,000 tonnes in the previous fortnight.
This is down some 42% on the previous year, but production that season got off to a very rapid start, due to a large amount of leftover cane from the rain-disrupted 2015-16 season.
About 35.2% of cane crushed went to sugar, up 1.7 points from the same time last year, reflecting the fact that sugar is more tempting to mills than last year, as it is more profitable compared to ethanol.
Ethanol demand grows
But there are signs that local ethanol demand is rising.
Ethanol sales by the centre-south units reached 2.04bn litters in March 2017, and demand for ethanol stood at 1.06bn litres.
This is down 5% year-on-year, but much stronger than in previous months, when consumption lagged 2016 by more than 20%.
Hydrous ethanol is Brazil's huge fleet of flex-fuel vehicles, while anhydrous ethanol is mostly exported for blending into gasoline.
"The amount of hydrate marketed in March 2017 represents a considerable increase in consumption of the product," said UNIC, with
This is because monthly sales in recent months were showing a fall of more than 20% compared to the previous year, and in the last month, this decrease was only 5% compared to March 2016.
"This increase in the volume of hydrated ethanol sold is due to the greater economic competitiveness of biofuels compared to gasoline in the main consuming regions," Unica said.