Sugar production in the Center-South of Brazil should be 3,1% higher in the second half of August

Sugar production in Brazil's Center-South is expected to total 3,06 million tons in the second half of August, reflecting a 3,1% increase on the year, an S&P Global Commodity Insights survey of ten analysts showed on September 12 .

During the survey, the sugarcane crushing estimate for the period ranged from 35,8 million tons to 46,9 million tons. The average estimate was for a total sugarcane crushing of 43,9 million tons, an increase of 1,5% in the year.

“All eyes will be on the sugar mix, which should indicate whether mills were able to maximize their sugar production amid rain interruptions, which delayed the harvest,” said Luciana Torrezan of Platts Analytics.

The proportion of cane used for sugar production is expected to be 47,52%, up from 46,47% in the previous year. Brazilian producers took advantage of the high price of ethanol during the early stages of the harvest, but mills shifted more of their cane crushing to sugar production in the remaining period of the harvest to take advantage of the sugar premium over ethanol production.

Platts valued hydrous ethanol at the Ribeirão Preto plant converted into raw sugar equivalent to 13,32 cents/lb on September 9, according to data from S&P Global. The NY11 October sugar futures contract closed at 18,22 cents/lb on September 9, reflecting a premium of 4,90 cents/lb over the price of hydrous ethanol expressed in raw sugar equivalent ex-CBIOs.

The sugar premium for ethanol production would approach 4,30 cents/lb if decarbonization credits were added to the premium calculation. The CBIO, equivalent to 1 mt of CO2 not released into the atmosphere, is an instrument issued by biofuel producers and importers to ensure that Brazil achieves its decarbonization goals.

Recoverable sugar per ton of sugar cane, or ATR, is expected to be 153,91 kg/mt, a drop of 0,7% year-on-year.

Total production of ethanol from sugar cane is expected to be 2,26 billion liters, also a drop of 0,7% in the year.

Hydrous ethanol production was 1,36 billion liters, according to the average of analysts' responses to the survey. This would represent an increase of 2,9% for the year. Anhydrous ethanol production in the second half of August was forecast at 903 million liters, a drop of 5,5% in the year, according to the survey.

UNICA is expected to release its official production numbers in the coming days.