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- Despite rains disrupting crushing pace this fortnight, cumulative sugar production is 7.9 ahead yoy.
- If dry weather continues, there is a risk of ag. yield decrease for the coming months.
- This could result in a sooner than expected end of the crop.
Summary Table 2H August
Slowdown in Operations
- In this fortnight, 12% less cane was crushed if compared to the 1H of August.
- The crushing pace reduction is a result of rains, especially in the state of Paraná and Mato Grosso.
- However, it didn’t affect São Paulo, especially in Ribeirão Preto and São José to Rio Preto.
- So the mills in the region were able to crush without interruptions.
- So far CS has already processed 70% of the estimated cane for the season.
Historical Average of Rains in CS Brazil vs 2019 & 2020e – Low levels of Rain Reported on the past 5 months
- However, it is important to notice that the lack of rains could be negative for cane development.
- So far no mill has registered significant agricultural cane loss (TCH), but concerns are raising.
- If the dry spell continues and TCH falls significantly, the crop could end a few weeks sooner than expected.
Dry weather, Higher Sugar Content
- The dry weather allows a higher sugar concentration in cane (ATR) – in this fortnight ATR reached 156.1kg/ton, an increase of 3.4% yoy.
- Attractive returns in BRL/mt of sugar made mills allocate more ATR towards sugar output, mix of 46.8%.
- So far, the cumulative sugar production this season has reached 25.9 mmt, – 7.8mmt ahead yoy (or 43.8% more).
CS Cumulative Sugar Production – Until August CS sugar output has reached 25.9mmt
- Out of the additional 7.9mmt, it is estimated that 6.0mmt is due to sugar mix increase and the remainder 1.9mmt due to higher ATR and strong crushing pace.
Ethanol Market
- Hydrous sales by the mills registered 1.59 bi litres in August, 21% decrease yoy.
- The sales retraction was already expected due to the recession provoked by the pandemic.
CS Monthly Hydrous Domestic Sales – slow recovery
