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Analyst Insights Analyst Insights CS Brazil – Earlier Close, Higher Output

November 27, 2019

1 min read

CS Brazil – Earlier Close, Higher Output

  • Brazil’s sugar output is at 26m tonnes. 
  • Their hydrous output is also at a record high due to the max cane allocation going into ethanol. 
  • More mills will be closing over the coming weeks. 

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Closing Early… 

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  • This season mills are closing earlier than usual. 
  • During the 1H of November, only 56% of CS mills where in operation compared to 70% last season. 
  • This is the lowest percentage seen over the past seven crops.
  • It is not due to cane availability, which is expected to end around 3% higher year on year, but due to excellent time efficiency.
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  • According to UNICA, another 74 mills should end the season in 2H November and only 71 mills should still be operating in December. 

…but higher output 

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  • Record hydrous production has seen cumulative volume reach 21.5b litres until 1H November. 
  • Due to excellent demand, prices have been on the rise and reached BRL1.9/litre (14.3c/lb) last week. 
  • Over the next fortnights, the mills that are still operating will continue to focus on ethanol output. 
  • However, this will not prevent the final figure of the season for sugar production from surpassing last year’s. 

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Hydrous Sales 

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  • Hydrous sales at 1H November reached 949m litres. 
  • Consumers continue to respond favourably to hydrous due to price parity. 
  • Price parity has increased to 66%, but this has not affected consumer preference. 

Corn Ethanol Production   

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  • Total corn ethanol production was up 102% YoY at 810m litres in 1H November.
  • The majority of output remains focussed on hydrous, with 557m litres of production until 1H November.
  • At the current pace, corn output could surpass 1.4b litres this season.

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Ana Zancaner

Ana graduated from Insper University Sao Paulo in 2013, with a bachelor’s degree in business administration. She joined Czarnikow as an intern in 2013 and is now our senior analyst in our Sao Paulo office. At Czarnikow she is responsible mainly for analysis of the Brazilian sugar and ethanol sector but supporting other consulting requests as well.

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