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CS Brazil H1 May sugarcane crush seen at 38.34 mil mt: Platts survey

Mar. 23, 2018

The total amount of sugarcane crushed in Center-South Brazil is expected to be 38.34 million mt in the first half of May, according to an S&P Global Platts survey of analysts, up 34%, or 9.69 million mt, on the year.

While there was a record crush in April, H1 May has probably not followed suit. The dry weather and a fast pace of harvesting last month resulted in 69 million mt of cane crushed, but the first period of May was wet with roughly 1.7 days lost to rain, according to the survey.

The record high in H1 May was in the 2013-14 season (April-March) when CS Brazil crushed 40.42 million mt.

Taking the average of the poll of analysts for the volume crushed expected in H1 May, the amount of cane crushed since the season began April 1 will total 107.4 million mt, up 56% on the year.

Wider analyst expectations for the cane crush ranged from 36.9 million mt to 40.5 million mt. Official numbers will be released by Industry Association UNICA on Wednesday at 10:00 am local time (1300 GMT).

Analysts at Kingsman, an agricultural analytics unit of S&P Global Platts, are forecasting a cane crush of 38.3 million mt.

Kingsman senior analyst Claudiu Covrig said even if May has been wet compared with a dry April, the increase in the number of mills coming online in H1 May should have contributed to a higher crush volume than in H2 April.

"The ATR expected for the period should have continued to recover (usually there is an upward trend toward the peak of the crop) leading to a higher sugar mix," Covrig said. "We estimate ATR recovered on the fortnight by some 3.4 kg/mt to 126 kg/mt (up 8.09 kg/mt year on year) pushing up the sugar mix" -- expected at 44% (1.1 percentage points higher than in H2 April and 6.1 percentage points higher on the year), he added.

Analysts surveyed by Platts estimated the amount of sugarcane crushed directed to produce sugar in H1 May was 43.89%, with the balance (56.11%) going to ethanol. The ATR was 126.04 kg/mt of cane, the survey showed.

Sugar output is expected to total 2.025 million mt, an increase of 66% year on year. If realized total sugar output so far this season is 97% higher on the year at nearly 5.3 million mt.

Although a higher sugar mix is expected this season, total ethanol output is expected to increase 28% year on year in H1 May to 1.59 billion liters, according to analysts surveyed. Of this, nearly 997 million liters of hydrous ethanol and 596 million liters of anhydrous.

Hydrous is used as a standalone biofuel in flex-fuel vehicles, while anhydrous is blended with gasoline at a ratio of 27%.