The Cane Crush Has Accelerated at CS Brazil

Insight Focus

  • Cane crush has gained strength with more mills in operation in the second fortnight of April
  • The mills crushed 23.82 m tonnes of cane, with sugar and ethanol production at 934k tonnes and 1094 m liters respectively.
  • The pace should continue, with 57 more units coming into operation at the CS in the first half of May

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The Pace is Starting to Gain Strength

  • The beginning of the crop was marked by the delay of the crushing in the wait for the better development of the sugarcane fields, but it is catching up now.
  • The amount of cane processed rose to 23.82mmt, a significant improvement alongside 1H April
  • But still lagged about the same period last year – a retraction of 19.72%.

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  • This decline can be explained by the lower number of mills in operation at the beginning of the crop – 180 units were in operation compared to 207 in the same period last year.
  • A further 57 units are expected to start operating at CS in the first half of May, supporting the operation.

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  • The quality of raw material had a slight improvement concerning the beginning of the crop, from 98.66 kg/tc to 108.46 kg/tc. Even so, it represents a retraction of 7.31% compared to 2021.
  • This drop can be explained by the rain at the beginning of the year and the later start of the 22/23 crop.
  • With the approach of dry period, rains are more spaced throughout the CS region. As a result, mills operated smoothly – no operation day was lost on 2h April.

 

Ethanol Sales

  • In the second half of April, a retraction was seen in the commercialization of ethanol
  • 1.16 billion liters of ethanol were sold in the CS region – a decline of almost 0.85%compared to the same month of the last year
  • The production unites in CS registered 696.17 million liters sales of ethanol in 2H 2022, representing 12.58% retraction to 2H 2021.

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  • The decline in the domestic market reflects the loss in the competitiveness of ethanol compared to gasoline as of the second half of April.

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  • Thus, domestic sales of anhydrous increased 15.34% compared to April 2021 – totaling 735.63 million liters in the month.

Closing April 2022
 

  • The pace of cane crush and sugar production is advancing, and it is expected to continue.
  • Sugar and ethanol production in April totaled 1.06mmt and 1.49 billion liters respectively.
  • April domestic market hydrous sales were 1.37 billion liters – a drop of 5.52% compared to 2021.
  • The fall reflects the loss of competitiveness of ethanol against gasoline (parity above 70%)
  • The scenario is volatile, this Tuesday (10th May, 22) the price of diesel was readjusted by Petrobras
  • The price of gasoline has not yet been notified, but it is not out of the question.
  • Now, there is a gap of around -9% between the domestic and international markets.
  • Any readjustment in the price of domestic gasoline could affect this delicate situation.

Click here to read the report on our 2022/23 crop estimates.

Other Insights That May Be of Interest…

How the Brazilian Fuel Price Adjustment Hits Sugar and Ethanol 

Explainers That May Be of Interest…
 

Czapp Explains: The Brazilian Ethanol Industry 

Czapp Explains: Centre South Brazil’s Sugar Industry 

Czapp Explains: Brazil Gasoline Price Composition 

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Juliana Shao

Juliana graduated from Fundação Getúlio Vargas in 2020, with a bachelor’s degree in business administration. She joined Czarnikow as an intern in 2020, and now is a junior analyst in the advisory and analysis team from São Paulo office. She is responsible for advisory and client management, writing reports about macro aspects in Brazil, and marketing strategy for both Czarnikow and Czapp to spread the brand throughout the market.

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