Brazilian cane mills pumped out just over 3 million tonnes of sugar in the first two weeks of August with the help of dry weather, a volume 14 percent greater than the same fortnight a year ago, milling association Unica said on Thursday. Despite the rapid pace of sugar production in the past month and a half, mills in the region will not recover the time lost to rains earlier this season until mid-December, well into the rainy season, Unica President Antonio de Padua Rodrigues said.
Spring rains typically start between August and October and then intensify into the first quarter of the following year, which makes the crushing of cane and production of sugar and ethanol increasingly difficult. Mills tend to shut down around December until March or April, when rains ease. Unica said that total sugar output since the start of the crushing season in April is still down 12 percent from the same period a year ago at 15.32 million tonnes. A late start to crushing after last year's drought and heavy May and June rains have held mills back from harvesting at top capacity.
The center-south, which accounts for 90 percent of Brazil's cane output, is still more than 37 million tonnes of cane behind last year in its crushing. Crushing reached 261 million tonnes by mid-August, Unica said. Market estimates see the center-south crop at 510 million tonnes this year and some leaders in the sector are starting to talk about some of that cane being stranded in the field until next season because mills will not have time to harvest everything before the rains set in.
Mills are favouring sugar production as much as capacity will permit with 48.7 percent of the cane processed going to production of the sweetener and the rest for ethanol this season. That is up from 47.1 percent last year. In the first two weeks of August, mills moved nearly all the cane they could toward sugar production, with 51.4 percent of the crop going to sugar, up from 50.2 percent last year.
Ethanol remains a money losing operations for mills due to the government policy of holding gasoline prices artificially low on the domestic market. The two fuels compete for the same market share and production costs for ethanol have surged in recent years.
Ethanol production was up from last year over the first two weeks of the month, however. Mills focused on anhydrous ethanol, production, which is up 20.6 percent from a year ago. This type of ethanol is mixed into gasoline as an oxygenate. Production of hydrous ethanol, which is sold pure at the pump for flex-fuel cars, was down slightly from a year ago over the first half of the month.