SAO PAULO: Brazilian center-south (CS) mills produced 858,000 tonnes of sugar in the second half of October, 50% less than a year ago, but the volume was still higher than the market expected.
A survey by financial information provider S&P Global Platts said analysts were expecting sugar production of 711,200 tonnes. Sugarcane crushing in the period reached 17 million tonnes, industry group Unica said on Wednesday, above market expectations of 13.9 million tonnes. ICE raw sugar futures extended losses after the report and were down nearly 1% in mid-morning trading.
Unica said that Brazil’s CS ethanol production was 1.05 billion liters in the second half of October, 30% less than a year ago, but above expectations of 838 million liters.
Mills continue to increase the share of cane they allocate to ethanol production from the previous season, consequently cutting sugar production. They earmarked 63% of cane to ethanol versus 56% last year.
“The plants are prioritizing anhydrous ethanol production due to the commitment with the blending mandate,” said Unica’s technical director, Antonio de Padua Rodrigues. Brazil blends 27% of ethanol to gasoline. Due to lower production and high ethanol costs this year, fuel distributors have asked for a reduction on the blending mandate, which so far has not happened.
Coffee crop to fall 20pc from 2020
Brazil’s arabica coffee crop next year will likely fall around 20% from 2020, the last year of high production in the biennial arabica cycle, to 40 million bags after a year of drought and frosts, consultancy Safras & Mercado said on Wednesday.
According to Safras, Brazil produced around 70 million 60kg bags of coffee in 2020, a record. From that, 50 million bags were of the milder arabica variety, with robusta production seen around 20 million bags. The consultancy projects 2021 production, an off-year in the arabica cycle, at 56.5 million bags.
Safras coffee analyst Gil Barabach said during a presentation that this is a preliminary estimate, since there is still a long way until harvest starts around May or June next year.
He said there is a lot of uncertainty regarding the new Brazilian crop, but that recent rains improved the production prospect.
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