Brazil’s sugar production slumps 52% YOY

Brazil’s center-south region’s sugar production registered a significant drop in the first two weeks of the new season (H1 April), down 52% to 340,000 tons year-on-year, sugarcane lobby group Unica said. Cane mills have intentionally delayed processing due to latter rain and late maturing of the sugarcane plants.

“The rains early in April hampered harvesting by mills that were already operating and delayed the initial crush by those that were planning to start the crop,” Unica’s technical director Antonio de Padua Rodrigues said.

A total of 64 mills postponed the start of operations to the second half of April, officially the first month of the 2019/20 crop year, according to data from Unica. Crushing of sugar cane by mills in the region fell by 37.99% during the first two weeks of April, to 13.86m tons.

#SAFRA O volume processado de cana-de-açúcar pelas unidades da região Centro-Sul do Brasil atingiu 13,86 milhões de toneladas na 1ª quinzena de abril, com queda superior a 8 milhões de toneladas (37,99%) em relação à moagem apurada no mesmo período de 2018:https://t.co/plu8MMDAP5 pic.twitter.com/ZuAYxjTV06

— UNICA (@UNICA_cana) April 25, 2019

Conab data (Brazil’s National Agricultural Supply Company) indicates the country’s ethanol production is expected to increase by 23.3% to 33.58bn liters in the 2018/19 crop cycle. However, due to delays in cane crushing, ethanol production fell 26% to 737m liters during H1 April.

High oil prices are likely to cause mills in Brazil to continue favoring ethanol production over sugar production due to high demands for ethanol at fuel pumps. According to Reuters, the mills allocated only 23% of cane to sugar production in H1 April, compared to 31% seen last year.

Meanwhile, agriculture consultancy Datagro reported that Brazil had scheduled to export 380,401 tons of sugar last week, with 12 vessels, of which 34.5% would go to Algeria.

CS Brazil: sugar shipment nomination stalls this week with 12 vessels scheduled to ship 380,401 mt of sugar, of which 34.5% to Algeria

— DATAGRO (@DATAGRO) April 26, 2019

Unica data shows Brazil’s sugar production plummeted in the 2015/16 season to 33.84m tons; however, the country bounced back in subsequent years. The following graph (based on Unica data) displays Brazil’s sugar and ethanol production patterns for the last five seasons:

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