January 5, 2011
Brazilian Sugar/Ethanol Mills Devote More Sugarcane to Sugar Production
The 2010/11 sugarcane harvest season in southern Brazil is rapidly coming to an end with only a few sugar/ethanol mills continuing to operate. Within a few weeks, the remaining mills will also close and everyone will resume operations next March or April.
According to the Union of Sugarcane Industries (UNICA), during the April to December timeframe, the sugar/ethanol mills in southern Brazil processed 525.5 million tons of sugarcane, which is 7% more than last year, but below initial expectations at the start of the harvest season. The sugarcane harvest season in southern Brazil starts in late March or early April and it ends in late December or early January. The extended dry season in 2010 reduced the tonnage of sugarcane, but the sugarcane in 2010 actually contained a higher amount of Total Recoverable Sugars than the waterlogged crop of 2009.
As a result, the southern Brazilian mills produced 33.9 million tons of sugar up until December 15th, which was 19% more than during the 27.9 million tons during the same period in 2009. In addition to more Total Recoverable Sugars, the mill operators devoted more of the sugarcane toward the production of sugar in 2010 than they did in 2009. During the 2010/11 harvest season, 44.9% of the sugarcane went for sugar production compared to 43.4% in 2009/10 (+1.5%). During the same period, the southern Brazilian mills produced 25.1 billion liters of ethanol (17.8 billion liters of hydrous ethanol-E100 and 7.4 billion liters of anhydrous ethanol used to make E25 gasoline). These are up 8.5% and 22.8% respectively compared to 2009.
UNICA feels that the supply of ethanol will be sufficient to meet the domestic market demands until the sugarcane harvest resumes in several months. In contrast, the domestic market in Brazil was short of ethanol last year at this time and as a result, ethanol prices spiked, but drivers of flex fuel vehicles simply switched to gasoline. Any time the price of ethanol is more than 70% the price of gasoline, it is more economical to use gasoline.