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March 28, 2019

2019/20 Sugarcane processing in Brazil off to a Slow Start

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

The Brazilian Union of Sugarcane Industries (Unica), announced on Tuesday, March 26, that 27 sugar/ethanol mills in southern Brazil were up and running during the first half of March compared to 50 mills during the first half of March in 2018. During the first half of March, these mills processed 1.59 million tons of sugarcane, which was 53% less than a year earlier when they processed 3.42 million tons during the first half of March 2018.

In addition to the traditional mills in southern Brazil that process sugarcane, six mills were also producing ethanol from corn during the first half of March. Those mills were either corn-based facilities or sugar mills that have been retrofitted to use corn during the summer rainy season when sugarcane is usually not available.

The reason cited for the lower amount of sugarcane being processed was dry weather during December and January and then wet weather during March that delayed the development of the sugarcane and the start of the harvest. April 1st is generally considered the start of the sugarcane harvest season, but some mills can start harvesting in March.

Unica reported that the amount of sugar produced during the first half of March was down 80%, but the amount of ethanol production was only down 23.5%. The reason for the smaller reduction of ethanol production is probably due to the corn-based ethanol facilities that continue to operate year round.

From the start of the harvest last year until March 16th, the internal sales of anhydrous ethanol (used for blending into gasoline) was 8.09 billion liters, while the internal sales of hydrous ethanol (sold as E100) was 20.05 billion liters. During the same period, the total amount of sugarcane harvested was 566.05 million tons, which is a decline of 3.8% compared to a year earlier.