Sugar production in Brazil's center-south region fell 52 percent in the first two weeks of the new season compared with the same period in the previous crop, as rains disrupted processing and mills delayed operations, industry group Unica said on Thursday. Center-south mills produced only 340,000 tonnes in the first half of April, when they crushed 13.8 million tonnes of cane or 38 percent less than in the same period a year earlier. Ethanol production fell less, 26 percent, to 737 million liters.
Mills allocated only 23 percent of cane to sugar production early in April versus 31 percent last year, Unica said. The data was below market expectations. Sugar and ethanol analysts surveyed by Platts expected cane crush at 16.5 million tonnes and sugar production at 436,000 tonnes in the first two weeks of the new crop.
"The rains early in April hampered harvesting by mills that were already operating and delayed initial crush by those that were planning to start the crop," Unica's technical director Antonio de Padua Rodrigues said. Unica said that 64 mills rescheduled the start of operations for the second half of the month, because they were unable to start in the first two weeks of April, officially the first month of the 2019/20 crop.
Sales of hydrous ethanol, the fuel that competes directly with gasoline at pumps for car owners' preference, rose 44 percent in the first half of April compared with last year, as the biofuel remains cheaper than gasoline in the largest fuel consumption regions of Brazil. Some fuel distributors had reduced their ethanol stocks in the last weeks, waiting for lower prices at the beginning of the crop, but had to cover positions at the last minute as mills delayed production. Hydrous ethanol prices jumped 25 percent in Sao Paulo state in the first three weeks of April.
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