July 12, 2013

% of Sugarcane used for Sugar in Brazil Second Lowest in 10 years.

Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.

Heavy rainfall in southern Brazil during the last half of June slowed the sugarcane harvesting pace in southern Brazil. According to the Union of Sugarcane Industries (Unica), during the first half of June there were 35.8 million tons of sugarcane processed in southern Brazil and that fell to 29.1 million tons during the second half of June.

From April until the first of July this year, 180 million tons of sugarcane were processed in southern Brazil, which was more than last year (128 million tons), but still far short of the 215 million tons processed during the same time in 2010/11.

The trend to use more sugarcane for ethanol production and less for sugar production continued unabated in June. During the second half of June, 41.9% of the sugarcane was used to produce sugar compared to 47.8% during the same period last year. Thus far this harvest season, 41.8% of the sugarcane has been used to produce sugar, which is the second lowest percentage in the last ten years. Only during the 2008/09 harvest season was there a lower percentage of the sugarcane used for sugar production.

The total ethanol production during the second half of June was 6% more than the same period last year, but anhydrous ethanol production increased 18%. Anhydrous ethanol is blended into gasoline and the big increase in anhydrous ethanol production was to accommodate the increased blend of ethanol into gasoline which went from 20% to 25% on May 1st.