October 11, 2012

Sugarcane Processing in Brazil Lags 7.7% Behind Last Year

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

Sugarcane processors in southern Brazil continue to be disappointed in the amount of sugarcane they have processed thus far this harvest season. According to the Union of Sugarcane Industries (Unica), the amount of sugarcane processed in southern Brazil from April through the end of September totaled 381 million tons or 7.7% less than the 413 million tons processed during the same period last year.

Wet weather earlier in the harvest season slowed the harvest process and they have yet to recover from the slow start.

The amount of sugar produced in Brazil since the harvest began totals 24 million tons compared to 26 million tons produced last year during the same period. The amount of ethanol produced thus far is 15.1 billion liters, which is 11.3% less than last year. Of the ethanol produced, there have been 6 billion liters of anhydrous ethanol (8.6% less than last year), which is blended into gasoline, and 9.1 billion liters of hydrous ethanol (12.9% less than last year), which is sold as E100 for drivers of flex fuel vehicles.

Thus far this harvest season, processors have sold 10.6 billion liters of ethanol including 4.56 billion liters of anhydrous ethanol (42.7% of the total sold) and 6.1 billion liters of hydrous ethanol (57.3% of the total sold). Approximately 83.4% of the ethanol has been sold to the domestic market and 16.6% has been exported.

During the second half of September, processors emphasized more ethanol production and less sugar production in order to meet the demand for ethanol. In October of 2011, the Brazilian government reduced the percentage of ethanol blended into gasoline from 25% to 20% in order to extend tight supplies of ethanol. The energy minister in Brazil would like to see the blend percentage return to 25% at the start of the next harvest season in April, but no final decision has been made.