Sugar output from the main producing region in Brazil fell 43 percent in the first half of October as rains delayed cane processing and mills continued to favor ethanol production over sugar, cane industry group Unica said on Wednesday.
Mills in Brazil's center-south region produced 1.11 million tonnes of sugar in the first half of October compared to 1.28 million tonnes in the previous two-week period and 2 million tonnes at the same time last year, Unica said.
Cane crushing fell to 25.58 million tonnes versus 27.64 million tonnes in the second half of the previous month and 32.5 million tonnes seen at this time last year. The numbers were somewhat in line with market expectations. Mills had lost more than five processing days early in October due to rains that make cane harvesting impossible.
Mills were also unmoved by recent rises in sugar prices in New York and continued to heavily favor ethanol output over sugar production, since the biofuel has given them better returns. They earmarked almost 68 percent of all cane to produce the fuel, leaving only a bit more than 32 percent to sugar making. Unica said local sales of hydrous ethanol were up 42 percent in October versus last year, as owners of flex fuel cars increasingly prefer the biofuel over more expensive gasoline.