SAO PAULO: Mills in Brazil's center-south produced 3.02 million tonnes of sugar in the first half of July, 55pc more than in the year-ago period and just shy of the 15-day period record, as plants continue to heavily favor the sweetener at the expense of ethanol.

According to a Friday's report by sugar industry group Unica, ethanol production fell 2.3pc in the period to 2.12 billion liters, while ethanol sales were 14pc below as the fuel market remains depressed by coronavirus-linked measures.

Cane crush hit 46.54 million tonnes in the first half of July, 13pc more than a year ago.

Sugar production was near an all-time high for a 15-day period reached in 2017 of 3.1 million tonnes, as mills allocated around 48pc of cane to the production of the sweetener, a much higher amount than the 36pc last year when ethanol was gaining market share in Brazil.

Market estimates gathered by S&P Global Platts had indicated sugar output at 3.08 million tonnes and total crush at 45.8 million tonnes.

The market was expecting an even smaller ethanol production at 2.04 billion liters.

Harvest pace has been quick in Brazil due to very dry weather.

A study published this week by Unica and the Cane Technology Center (CTC) said rains so far in the crop (April-June) were 40pc below the average for the period.

While it helps harvest pace and increases sugar content in cane, the dry weather could cut agricultural yields in the later stage of the crop, as well as in the new season in 2021.