Cane crush in Brazil's Center-South region expected at 41.55 million mt: survey

The amount of sugarcane crushed in Brazil's key Center-South region in the second half of September is expected to total 41.55 million mt, down 2.3% year on year, an S&P Global Platts survey of analysts showed Friday. The 2017-18 sugarcane season in the Center-South, the world's largest sugarcane and sugar-producing region, started April 1.
Industry association UNICA is expected to release its official production figures during the first days of the week, as Thursday will be a national holiday in Brazil.
The volume of sugarcane crushed would be down 8.6% from two weeks prior, when 45.44 million mt was crushed.
Despite lower crush volumes compared with the previous 15 days, it would be just slightly lower than the record volume ever crushed for the last 15 days of September, which in 2016 was recorded at 42.53 million mt.
Analysts that Platts sourced would attribute lower crush volumes on maintenance stoppages, which are common five months into the harvest season. And stronger rains initially were expected in the H2 September, but they did not occur. Surveyed analysts were expecting only 0.5 day lost to rain, boosting cane's total recoverable sugar, or ATR, levels and favoring sugar production.
"Since some mills have been already reducing their activities -- we are out of the season's production peak -- we estimate the volume of cane crushed to have dropped about 3.6 million mt in the previous two weeks and by 730,000 mt on the year to 41.8 million mt," said Claudiu Covrig, senior sugar analyst at Kingsman, the agricultural analysis unit of Platts.
The consensus for ATR was 153.35 kg/mt in H2 September, with a wider range of 150-157.5 kg/mt, compared with 145.78 kg/mt a year ago and 150.51 kg/mt in H1 September.
Considering ethanol continued to pay better than sugar during H2 September, the proportion of sugarcane directed to sugar production is expected to be 47.22%, down from 47.96% recorded the prior two weeks. Compared with the prior-year crop, the 2016/17 sugar mix dropped 5.8%.
Ethanol production turned more profitable than sugar in early August for the first time since Q1 2016, according to Platts data. Hydrous ethanol's average premium over raw sugar stood at 59 points from August 4 to October 5, according to Platts' calculations. Hydrous ethanol output in H2 September was expected to have reached 1.125 billion liters, up 12.6% year on year, while anhydrous production should be 838 million liters, up 3.7% year on year.
Considering average poll results for crushing, the accumulated volume in the first six months of the season (from April to H2 September) is expected to have reached 468.6 million mt, down 1.1% year on year, the survey showed.
Despite the fall in crush volume, cumulative sugar production was expected to be 5.3% higher than the same period last year at 29.25 million mt, as a greater proportion of crushed cane has been directed to sugar production this season.

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