CS Brazil H1 July sugarcane crush seen at 47.62 mil mt: Platts survey

29.07.2016

The sugarcane crush in Center-South Brazil is expected to be 47.62 million mt in the first half of July, up 62% on the year, a survey of analysts by S&P Global Platts showed Thursday.

Industry association UNICA will release the official figures Monday.

The wider range of analysts' expectations for cane crush spanned from 46.47 million to 48.8 million mt, while expectations for the total recoverable sugar (ATR) ranged from 132 to 135.3 kg/mt of cane.

If the expected cane crush is confirmed, the accumulated volume of sugarcane crushed since the season began April 1 would total 262.2 million mt, up 16% on the year.

Platts Analytics' Kingsman forecast a cane crush of 48.2 million mt.

"First of all, the weather remained dry so mills managed to fully capitalize on harvesting. Secondly, four more mills probably started up in July bringing the total operating to 275 compared with just 265 a year earlier due to heavy rain. Thirdly the ATR level has risen further while sugar continued to pay better than ethanol by at least 500-550 points during the whole period," Kingsman analyst Claudiu Covrig said.

The survey put the ATR at 133.04 kg/mt of cane, up 0.47% from a year earlier and up 3.08kg/mt from the second half of June.

After almost one month of completely dry weather in the most important producing regions the sugarcane was expected to have accumulated more sucrose.

According to the survey, the percentage of cane that was directed to produce sugar is likely to be 47.48% in H1 July, up 8.57 percentage points on the year and slightly higher than 47.09% in H2 June.

Sugar production is expected to have reached nearly 2.86 million mt in H1 July. If analysts' estimates are confirmed it might be a bearish signal to the market with sugar production soaring 97.4% year on year.

The accumulated volume of sugar produced would be 13.8 million mt up 30.51% on the year.

As for ethanol, the average of analysts' expectations pointed to total output of nearly 1.95 billion liters, up 40% on the year. Of this, hydrous ethanol would account for 57% of the total.

Even with the higher production expected by market participants and weak consumption the hydrous ethanol prices in the domestic market has been in an upward trend. From July 15 to July 27 domestic price rose 4.12%.

 


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