Rains slow Brazil center-south crush, prices support ethanol over sugar

From April through mid-October, Brazilian center-south cane crush reached 384 million metric tons (MMT), down 3.5 percent YOY. Despite this, production of cane ethanol has grown 22.7 percent YOY. This increase is the direct result of an elevated ethanol share: 64 percent of cane crushed in the season to date was converted into ethanol vs. 52 percent for the same period last season.

This high ethanol share means a low sugar share: A year ago, the sugar share of cane use was 48 percent, but this season that figure stands at just 36 percent. As a result, cumulative production now stands at 23.39 MMT of sugar, down a full quarter from output of 31.33 MMT a year ago.

In the first half of October, center-south cane crush reached 25.6 MMT, down 21 percent YOY. For that period, cane use favored ethanol manufacturing even more markedly, with 68 percent of cane diverted to fuel ethanol production. The decline in cane crush was attributed to unusually heavy rains.

In the average season, the bulk of the cane campaign is finished in late November through early December, at the chart below shows. Thanks to this delay and to the low sugar share, season-to-date sugar output reached a ten-year low as of mid-October. UNICA reports that 15 mills have now finished their campaign, with some 64 mills expected to continue operating, mostly in the Sao Paulo and Parana states.