Brazil's Center-South H2 Aug sugarcane crush at 38.91 mil mt, up 0.8% on year: UNICA

13.09.2017

Brazil's Center-South region crushed 38.91 million mt of sugarcane in the second half of August, up 0.8% from 38.6 million mt crushed in the same period a year ago, but down 14.1% from 45.29 million mt crushed in the previous two weeks, industry association UNICA said Tuesday.

The volume, the lowest half-month output since 31.59 million mt was crushed in the second half of May, was below market expectations of 41.95 million mt, according to a survey S&P Global Platts conducted Monday.

The 2017-18 season started April 1 in the Center-South, the largest sugarcane and sugar-producing region in the world.

Wet weather led to the lower cane crush in H2 August. Analysts estimated an average of 2.3 days of stoppage because of rain and maintenance, according to the survey.

The percentage of cane used to produce sugar was 46.95% in H2 August, down from 50.04% in H1 August and 47.75% in the same period a year ago and was the lowest percentage of cane used for sugar production since 46.78% in the first half of May. The balance was used to produce ethanol.

Due to the lower percentage, sugar production was at 2.536 million mt in H2 August, down 0.5% from 2.548 million mt produced in the same period a year ago and down 19.7% from 3.16 million mt in H1 August. It was the lowest sugar output in the H2 August since 1.84 million mt was produced in 2009.

Ethanol production was 1.774 billion liters, up 3.1% from 1.72 billion liters a year earlier, but down about 9% from 1.95 billion liters produced in the first half of August.

Hydrous production was 1.025 billion liters, up about 4% year on year from 986 million liters, but down 5.9% from 1.09 billion liters produced in H1 August. The balance was anhydrous, or 749 million liters, up about 2% from 734 million liters produced a year earlier, but down 12.7% from 858 million liters produced in the previous two weeks.

Total ethanol production includes a small volume of ethanol from feedstock corn. In H2 August, corn ethanol output was 12.55 million liters, including 9.73 million liters of hydrous ethanol.

Total recoverable sugar, or ATR, was 145.67 kg/mt of cane in H2 August, up 0.4% from 145.07 kg/mt in the same period a year earlier, but down from a 10-month high 146.29 kg/mt in the first half of August.

Cumulative ATR is now at 131.99 kg/mt, up 1% from 130.75 kg/mt year on year and the highest cumulative ATR, up to August 31, since 133.13 kg/mt in the 2014-15 season.

From April through August, the accumulated sugarcane crush in CS Brazil is 381.52 million mt, down 3.6% from 395.84 million mt crushed a year ago.

Despite the lower crush, CS mills have produced 23.26 million mt of sugar since April, up 3.4% year on year from 22.5 million mt produced and a record high for the first five months of a season.

Mills have allocated more cane to sugar over ethanol season, with the cumulative ratio of cane to sugar at 48.48%, up from 45.63% a year earlier.

As a result, cumulative ethanol production was down 7.6% year on year at 15.29 billion liters, also a five-year low.

Hydrous ethanol output was 8.69 billion liters since April, down 11.3% on the year, while anhydrous production totaled 6.6 billion liters, down 2.1% year on year.

Since the season started, corn ethanol output is at 101.95 million liters, including 18.53 million liters of anhydrous and 83.42 million liters of anhydrous.

Ethanol sales in H2 August were a 12-month high 1.27 billion liters, of which 1.16 billion liters went to the domestic market and 116.63 million liters were exported.

Total ethanol sales in August jumped to 2.39 billion liters, up 12.5% from 2.12 billion liters sold in July, but down 3.5% from 2.47 billion liters in August 2016.

August hydrous ethanol sales were a season-high 1.477 billion liters, while the remaining 908.35 million liters were anhydrous, down 3% and 4.4% year on year, respectively.

Hydrous ethanol is mostly used as fuel in flex-fuel vehicles and competes with gasoline at the pump. Anhydrous is blended with gasoline at a 27% ratio, according to a national mandate. Both products are also used in industry.


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