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Platts Survey of Analysts
- Cane crush: 47.27 million metric tons (mt)
- Cane yield (ATR*): 135.36 kilograms per metric ton
- Sugar production: 2.67 million mt
- Total ethanol production: 2.113 billion liters (ltr)
- Hydrous ethanol production: 1.230 billion ltr
- Anhydrous ethanol production: 861.67 million ltr
- Sugar mix: 43.75 %
- Ethanol mix: 56.25%
Sugarcane crush volumes in the key Center-South region of Brazil are expected to recover considerably to 47.27 million mt in the second half of July, with dry weather allowing a faster pace to the harvest, a Platts survey of analysts showed Thursday.
The wider range of analysts' expectations for cane crush spanned 45.9 million-48.8 million mt. The Brazilian Sugarcane Industry Association (UNICA) is expected to release its bi-monthly sugarcane harvest data early next week.
Kingsman, the agricultural analysis unit of Platts, forecasts the cane crush at 46.3 million mt (up 17.04 million mt from July 1-15) and cane yield measured by total recoverable sugar (or ATR) at 136.8 kg/mt, edging some 4.5 kg/mt higher than the previous two weeks.
Alessandra Rosete, agriculture analyst at Kingsman, points to an almost perfect weather with very little rain and the approach of the peak of the crop contributing to the increase in the crush and recovery in the ATR level.
"Only scattered rains in the states of Parana and Mato Grosso do Sul were recorded in the second half of July. Sao Paulo state -- the largest producer -- remained practically dry, with less than one day lost to rain," she added.
However, Rosete said the increase in flowering could still impact the ATR levels and limit the higher levels attributed to the dry weather.
In terms of sugar mix expectations, Kingsman sees a significant rebound at 44.3%, which is 5.2 percentage points higher than July 1-15 and about 0.7 points higher than a month earlier.
"Mills are now looking to close the gap in the sugar production and will aim at maximizing its output," Rosete said.
Considering analysts' estimates at 2.67 million mt of sugar for the second half of July, this would put the cumulative total for the current season at 13.38 million mt, a decline of almost 12% compared to the previous crop. The volume would still be the lowest for the period since the 2012-13 season.
However, with mills likely to maximize sugar output for the next three two-week periods, Rosete sees producers catching up to achieve a total sugar production very similar to last season's results. Kingsman forecasts total sugar output to reach 31.55 million mt in the 2015-16 season.
An average of analysts' expectations points to total ethanol output of 2.11 billion liters, with hydrous ethanol output expected to recover back to over 1 billion liters at 1.23 billion liters.
The second half July estimated anhydrous output is of 861.67 million liters, which would bring the total anhydrous production to 4.25 billion liters, down almost 17% year-on-year.
Nonetheless, this would be the highest two-week output of anhydrous so far this season.
An increased demand of spot anhydrous in the domestic market is already been observed by a few market participants since last week.
With the majority of the anhydrous volumes contracted on a long-term basis, any increase in spot-volume demand -- such as during a recent "rush" for exports to the US -- could create a market unbalance, traders said.
The fact that mills have been heavily focus on hydrous production was a major contributing factor, according to market participants.
Latest data from the Ministry of Agriculture on anhydrous stocks does show that although we are entering the peak of the crop, the amount of product by mid-July decreased compared to last year.
A total of 1.67 billion liters of anhydrous were recorded available for this period in Center-South, down 11% year on year. Meanwhile, hydrous stocks were unchanged year-on-year at 2.45 billion liters.
Kingsman estimates a substantial increase in imports from the US to make up for the shortfall of anhydrous production this year.
Visit the Platts and Platts’ Kingsman websites for more information on sugar and biofuels.
