Brazil’s center-south crush reached 596.3 million metric tons (MMT) of cane from April 2017 through March 2018, down by nearly 2 percent from crush for its 2016/17 campaign. Usage of that cane for sugar manufacturing was slightly higher in the last season, 46.5 percent in 2017/18 vs. 46.3 percent in 2016/17. Thanks to that modest increase and to higher sugar content, sugar output totaled 36.06 MMT, up 1.2 percent from output in 2016/17.

In the last half of March, the sugar share of cane use was only 21.5 percent, down nearly 14 points from the same period a year prior. Given price and currency shifts to date, the consensus is that center-south cane mills will favor ethanol over sugar at the start of the new season, which began this month. If market conditions continue to favor ethanol manufacturing for domestic fuel consumption, the expectation is that sugar production will fall by as much as 5 MMT this season.

Brazilian ethanol pricing & #11 world sugar futures

Source: Agência Nacional do Petóleo, McKeany-Flavell, DTN, UNICA
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