Mains Points 

• UNICA’s figures for the 2H July are again worrying the market with mentions of a drop in productivity of around 17%
• TCH continues to fall and with it, the volume of cane crushed in the period: 46.69 mmt, an effect already expected.
• Impact also seen in sugar concentration, coming lower than expected: 146.9 kg/tc

 Crop 2021/22 – 2H July 

Crushing, ATR and TCH weaker due to frost and drought

• As expected, the crushing came weaker in this fortnight, 46 mm, 4 mm less than the 20/21 fortnight.
• In cumulative terms, until the end of July, CS processed 304mmt, down 7.3% compared to the previous year.
• We continue to see downside risk for CS crushing this cycle.

• The drop in agricultural productivity so far is more a result of drought than frost, for now.
• Despite UNICA’s report mentioning a 17% drop in productivity in July, we think it’s too early to affirm this figure as the sample is still too small.
• The effects of the frosts seen at the end of last month will continue to be computed in the next fortnights.

• We believe that frost affected the quality of the plant, which came below our estimates.
• For 2H July, the ATR registered 146.86 kg/tc against 148.15 kg/tc observed in the previous cycle.
• On the other hand, the cumulative ATR remains strong (136.73 kg/tc) with an increase of 1.07% in relation to the value of the 20/21 crop.

• With these new figures in hand, we are working in our crop review that will be published soon on Czapp

 Ethanol Market – no news for anhydrous  

• The production of anhydrous ethanol remains firm – in the second half of July, 970 liters were produced
• 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.
• biofuel sales increased by 24.93%