Opinion Focus
Latest data release from UNICA indicates an increasingly trend for ethanol production. The fortnight was marked by heavy rains that caused stoppages in the field operations. CS Brazil production is still expected at 40 million tonnes.
1st Half of November: Parity Increasingly Trending to Ethanol.
UNICA released the harvest data for the first half of November.
The sugar mix fell again, even below what we expected, and was close to the level of 2021/22, when it reached 39.5%. The parity has already favored ethanol since the end of October, but this greater direction of sugarcane to ethanol is now more evident at the end of the harvest, since the mills are more flexible given that they have already managed to produce the compromised sugar.
With the crushing higher than expected, the reduction in the mix kept sugar production in line with CZ’s estimates. As a result, the harvest is on track to reach 40 million tonnes in 2025/26.
With the Center-South advancing towards the end of the harvest, 120 mills had already completed their activities by the first half of November, and, according to UNICA, another 65 closed in the second half of November. Heavy rains in the first fortnight caused five days of stoppage in operations, while in the second fortnight the lower precipitation reduced losses to an average of two days in the C
In the first half of November, ethanol sales were close to 1.4 billion liters. In the accumulated, the total volume of CS Brazil is at 22 billion liters – slightly below the 22.4 million of the previous harvest, with a decrease in sales for hydrous ethanol by 5.3% and an increase of 4.5% for sales of anhydrous in relation to the same period of the last harvest.
The higher volume of anhydrous is a result of the blend increase in August, which rose from 27% to 30%. The reduction in hydrous sales is explained by the parity slightly above the last harvest, which ended up impacting the hydrous market share.
