Center-South Brazil H1 June sugar production decreases 3.4% on year: survey

Sugar production in the key Center-South Brazil region is expected to total 2.472 million mt in the first half of June, down 3.4% year on year, an S&P Global Platts survey of 11 analysts showed June 22.

Of the analysts surveyed, the cane crush estimate ranged from 36.4 million mt to 44 million mt. The average estimate was for a total cane crush of 40 million mt, a 4.4% drop year on year.

Weather in the Center-South region was favorable for crushing during H1 June, with an estimated 2.2 days lost to rain and about 250-255 mills active as of June 16.

The proportion of cane used for sugar production is expected to be 46.6%, down from 47.1% a year earlier. Although Brazilian producers were taking advantage of the recent high prices of hydrous and anhydrous ethanol, long-term expectations are for mills to continue to maximize their sugar production, given the increased profitability of sugar production over ethanol production.

Platts assessed hydrous ethanol ex-mill Ribeirao Preto converted into raw sugar equivalent at 16.80 cents/lb on June 21. The October NY11 sugar futures contract settled June 21 at 17.07 cents/lb, providing a 0.27 cent/lb premium to hydrous ethanol in raw sugar equivalent.

Recoverable sugar per ton of sugar cane, or ATR, is expected to be 139.4 kg/mt, an increase of 2.1% year on year.

Total ethanol output from sugar cane is expected to be 1.78 billion liters, an increase of 0.3% year on year.

Hydrous ethanol output was expected to be 1.08 billion liters, according to the average of the analysts' responses to the survey. This would be a decrease of 12.4% year on year. Anhydrous ethanol output in H1 June was expected to be 705 million liters, an increase of 28.9% year on year, according to the survey.

Total ethanol output from corn is expected to be 115 million liters, an increase of 69.1% year on year. Hydrous ethanol output was expected to be 80 million liters, an increase of 56.3% year on year, and anhydrous ethanol output in H1 June was expected to be 35 million liters, an increase of 105.3% year on year.

Industry association UNICA is expected to release its official production figures in the upcoming days.