Mains Points
- UNICA’s figures for the 2H July are again worrying the market with mentions of a drop in productivity of around 17%
- TCH continues to fall and with it, the volume of cane crushed in the period: 46.69 mmt, an effect already expected.
- Impact also seen in sugar concentration, coming lower than expected: 146.9 kg/tc
Crop 2021/22 – 2H July
Crushing, ATR and TCH weaker due to frost and drought
- As expected, the crushing came weaker in this fortnight, 46 mm, 4 mm less than the 20/21 fortnight.
- In cumulative terms, until the end of July, CS processed 304mmt, down 7.3% compared to the previous year.
- We continue to see downside risk for CS crushing this cycle.
- The drop in agricultural productivity so far is more a result of drought than frost, for now.
- Despite UNICA’s report mentioning a 17% drop in productivity in July, we think it’s too early to affirm this figure as the sample is still too small.
- The effects of the frosts seen at the end of last month will continue to be computed in the next fortnights.
- We believe that frost affected the quality of the plant, which came below our estimates.
- For 2H July, the ATR registered 146.86 kg/tc against 148.15 kg/tc observed in the previous cycle.
- On the other hand, the cumulative ATR remains strong (136.73 kg/tc) with an increase of 1.07% in relation to the value of the 20/21 crop.
- With these new figures in hand, we are working in our crop review that will be published soon on Czapp
Ethanol Market – no news for anhydrous
- The production of anhydrous ethanol remains firm – in the second half of July, 970 liters were produced
- The average parity in São Paulo remains above 70% – a level at which hydrous ethanol is no longer considered attractive to drivers
- As a result, the demand for anhydrous (which is blended with gasoline) remains high compared to last year.
- biofuel sales increased by 24.93%