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December 1, 2011

Brazil's Sugarcane Harvest Ending on Disappointing Note

The amount of sugarcane processed in Brazil through the first half of November was 9% less than the previous year and as the harvest winds down the situation has even gotten a little worse. The amount of sugarcane harvested during the first two weeks of November was nearly 20% less than what had been harvested during the previous two week. Through November 15, the sugar/ethanol mills of southern Brazil processed 479 million tons of sugarcane and it is expected to remain disappointing through the end of the harvest. During the first half of November there were still 151 of the 214 mills in the region processing sugarcane, but only about 35 mills are expected to continue operations into December.

Of all the sugarcane processed this harvest season 51.5% has been for the production of 20 billion liters of ethanol, which is 16.5% less than what was produced last year. Of the total ethanol produced, 39% was for blending with gasoline (7.78 billion liters) and 61% (12.2 billion liters) was to be sold as E100. The total sugar production in southern Brazil through the middle of November has been 30.5 million tons, which is 4.7% less than last year.

Officials from UNICA, the Union of Sugarcane Industries, expect Brazil's ethanol exports to continue at a low level at least in the near term since the vast majority of the production is just to satisfy the domestic demand. According to the president of UNICA, Geraldine Kutas, worldwide production of biofuels increased 160% between 2004 and 2011 while at the same time, exports have continued to be marginal. Kutas made the comments at the eleventh annual International Datagro Conference recently held in Sao Paulo. The conference, which is one of the major events for the sugar/ethanol sector in Brazil, was attended by one thousand participants from 33 countries.