Corn Prices overtake Sugarcane as ethanol fuels Brazil

Corn plantings

Brazil’s slowdown in production for cane is still in a sluggish pace, with processing volumes reaching their lowest in a decade, leaving corn as the country’s biggest ethanol feedstock.

 

Cane producers in Brazil’s Central South is responsible for 90% of the country’s sugar and ethanol output, which crushed just 166,420 tons of the crop in the first half of this month.

A sharp fall-off is typical at this time of year, when mills take outages for the Centre South rainy season, cutting crush volumes well below levels which reached just short of 50, tons in the second half of July.

On the other hand, the declines of the season is considerably steep, with Unica, the Brazilian Sugarcane Industry Association, noting that this is the lowest volume produced for the first half of January in the last 10 years.

The weak crush volumes in the first half of this month were reflected in both weak Centre South output of sugar, which flopped by 92% year on year to 2,830 tons and of ethanol, Unica reported volumes of 42.5 million, down 37% year on year.

Wednesday’s Unica dat shows that Brazil’s overall cane harvest for 2017-2018, starting in April, had reached 583.6 million tons as of January 15, a decline of nearly 10 million tons.

Sugar output is at 35.83 million tons, which is around 580,000 tons higher than a year ago, with relatively high sugar prices earlier in the season. Encouraging mills to process more cane into the sweetener rather than ethanol, and with higher crop quality.

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