Brazil's centre-south sugar cane crushing missed market expectations in the first half of May, data provided by industry group Unica showed, as the 2022/23 season picks up pace but remains delayed from a year earlier.
Crushing reached 34.37 million tonnes in early May, down 17% from a year ago. Analysts surveyed by financial information provider S&P Global Commodity Insights had expected it to come in at 35.6 million tonnes.
Sugar output totalled 1.67 million tonnes in the period, a 30.1% drop, while ethanol production was down 10% to 1.65 billion liters, said Unica, whose ethanol data also includes fuel made from corn.
Analyst Estimates
Analyst estimates were seen at 1.67 million tonnes for sugar and 1.58 billion liters for ethanol, according to S&P Global Commodity Insights, with official figures coming roughly in line with expectations.
Mills are betting on ethanol output early in the season as current high biofuel prices make it more profitable than sugar, but are expected to ramp up production of the sweetener as the harvest heads to the second half, S&P Global noted.
Unica said that roughly 59.2% of crushing in early May was allocated for ethanol production, versus 54% a year ago and 59.1% expected by analysts.
Early May results came as 232 mills operated in the period, up from 180 in late April but still down from 236 a year ago.
Delayed Process
Most mills are picking up pace later than usual after delaying their 2022/23 activities in hopes of better yields in Brazil, the world's largest sugar exporter and a key ethanol producer.
"Part of the retraction seen (so far) is a consequence of the late start of operations by mills in the current cycle," Unica said in a statement.
An additional 17 plants began crushing in the second half of May.
News by Reuters, edited by ESM. For more Supply Chain News, click here. Click subscribe to sign up to ESM: European Supermarket Magazine.
