Main Topics
- The numbers for the 1H of June came even lower than market expectations
- 35.96 mm of cane were crushed in this fortnight – this represents a cumulative crush of 165.6 mmt
- As a result, 2.2 mmt of sugar and 1.7 billion liters of ethanol were produced.
Safra 2021/22 – 1H June
Cane Crushing Even Smaller
- The numbers for the 1H of June were lower than expected:
- Crushing dropped 14% yoy – 35.96 mm cane were processed in CS.
- Although rains were recorded in some regions, this was not the reason for the retraction of the crushing volume
- after all, there were few days of rain and concentrated in specific regions of the state of São Paulo, Paraná and Mato Grosso.
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- We believe that the deceleration in the crushing pace may be related to mills under maintenance, after two months of uninterrupted crushing.
- And another important factor to take into account is the reduced availability of cane in this crop, as a result of the constant drought in the CS Brazil.
- Agricultural productivity has been greatly impacted, with the latest data showing:
- The month of May presented the TCH (ton of sugarcane per hectare) of 77 ton/ha against 85.9 ton/ha
- For 1H of June, preliminary numbers from Unica point to an even greater drop in TCH (15%)
- On the other hand, the dry weather contributes to a higher concentration of sucrose in the plant.
- The ATR came in strong with 138.4kg/tc – the highest value in the last 14 years
- This has partially offset the lower crushing and although sugar production was 14% lower in the fortnight, it is still the second largest recorded – 2.2 mmt
Ethanol Market
- 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.
- This is due both to the recovery in fuel demand in relation to 2020, and to the reduction in the hydrous market share:
- In this fortnight, 420 m liters of anhydrous were sold (32% higher than last season)
- With the demand for anhydrous growing, we saw a change in the production profile of this crop.
- Until now, the cumulative anhydrous production had an increase of 15% yoy.
- We believe that the split between anhydrous and hydrous this season should be 37% vs the 32% recorded in the last cycle.
- The production of ethanol from corn also expanded.
- Despite the drop in the corn crop also due to the drought, the cumulative production reached 592.51 m liters, an increase of 41.65% compared to 2020/21.
