CS Brazil H1 Oct ethanol output seen down 13% on year: survey – S&P Global


Cane crush seen at 36.99 million mt

Sugar production estimate 2.734 million mt

Ethanol production put at 1.94 billion liters

Santos — Ethanol production in the first half of October in Brazil’s key Center-South region is expected to be 1.94 billion liters, a drop of 13% year on year, according to consensus expectations of analysts surveyed by S&P Global Platts Oct. 23.

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Of total ethanol production, 65.4% is expected to be hydrous ethanol — used as a standalone E100 biofuel in Brazil. Hydrous ethanol output was estimated to total 1.27 billion liters, a drop of 18.7% year on year, while anhydrous ethanol output is forecast to inch up 0.6% to 672 million liters. Anhydrous is used at a mandatory blending rate of 27% in Brazilian gasoline.

The bullish fundamental scenario for anhydrous ethanol and the higher premiums to hydrous in the spot market have been pushing up its production since H1 September in CS Brazil.

The region’s ethanol production has been capped since the start of the season on April 1 because of the rise in sugar prices on the export market. For the first two weeks of October, the consensus estimate was that 54.18% of the cane crushed would be used for biofuel production, down from 65.39% a year earlier.

Platts assessed hydrous ethanol in raw sugar equivalent on Oct. 22 at 11.40 cents/lb, while the front-month New York No. 11 raw sugar futures contract settled at 14.78 cents/lb, meaning a premium of 3.38 cents/lb or $74.52/mt for sugar over hydrous ethanol.

The amount of sugarcane crushed in the first half of October is expected to total 36.99 million mt, 1.7% less year on year, according to the survey.

If this forecast proves to be correct, the cumulative cane crush in 2020-21 up to mid-October will be 536.76 million mt, up from 512 million mt a year earlier.

Taking Platts Analytics’ total cane crush estimate for the season of 600 million mt, this would mean the harvesting was 89.46% complete, with just 64 million mt still to be harvested. The rapid pace of crushing could mean an early end to the crop, but not necessarily a sudden death, when producers fail to crush the whole volume of cane planted.


The total recoverable sugar (ATR) from the cane is expected to rise to 163.1 kg/mt from 154.3 kg/mt in H1 October 2019, which would be the highest for the period since 2007’s 165.7 kg/mt.

Sugar production in H1 October is expected to be 2.734 million mt, a surge of 43% year on year, the survey shows.

If this forecast turns out to be correct, it would represent the second highest volume of sugar produced in any H1 October, just behind the 2.790 million mt produced in 2012.

Including the production expected in the first two weeks of October, cumulative production since April 1 would be 34.68 million mt, an increase of 45.96% on the year.

Of the 11 analysts surveyed, two large producers put the cane crush at more than 37 million mt and the sugar mix at 46%, which would translate to 2.970 million mt of sugar or 240,000 mt more than the average estimate.

Industry association UNICA is expected to release its official production figures early next week.

Platts Analytics estimates that 36.5 million mt of cane will be crushed, of which 45.3% will be used for sugar production.

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