Sugarcane crushing in the second half of July in the Center-South region of Brazil increased by 4.3% compared to the same period last year — there were 2.02 million more tons of processed cane. In total, 48.93 million tons were registered in this period and the accumulated harvest is 282.79 million tons.
Sugarcane processing grew 2.31%. This is the first positive change in a month in the current crop. The data were released last Wednesday (10) by the Sugarcane Industry Association (Unica).
According to the association’s technical director, Antonio de Padua Rodrigues, this period intensified the positive trajectory of the first half of the month and marked an advance in milling. “This result is a reflection of the increase in crop productivity and, at the same time, of the good use of the industry’s time in this drier period of the year”, he says.
Unica’s forecast is that the increase in agricultural yield observed in July will continue in the coming periods, due to the low performance of this indicator in the past harvest, which represents the lowest values of the last 10 years, due to the drought and the impact of frosts.
The favorable weather conditions for the operationalization of the harvest brought greater availability of raw material which, added to the increase of 0.57% in the quality of the cane, also led to an increase in the production of sugar and ethanol.
The highlight in this period is also the increase of 2.78% in the production of ethanol, 2.98% hydrous and 2.49% anhydrous ethanol. This is a record for the production of anhydrous ethanol in a fortnight: the volume recorded was 1 billion liters, which exceeds the previous maximum, of 979 million produced in the same period, in the previous harvest.
Sugar production also grew by 8.4%, with a total of 3.3 million tons.
Should Ethanol Drop at Gas Stations?
For Felippe Serigati, economics professor at Faculdade Getúlio Vargas (FGV), if the improvements in the results of the sugarcane harvest remain constant, the greater supply of raw material could impact gas stations, reducing consumer prices.
“However, we must remember that the price of ethanol is not only determined by the amount of ATR (total recoverable sugar) supplied, but by several other variables, such as: gasoline price; sugar price; taxes, mills’ cash needs and market uncertainties,” he says.
According to Serigati, despite the improvement in July numbers, the sector’s production accumulated in 2022 remains lower than in 2021 — the supply of raw material is still below the average of the last 10 years.
The expert points out that in sugarcane areas they compete with soybeans — where there is crop rotation — and when there is a persistent improvement in soybean profitability, there are producers who do not return to sugarcane after the rotation period, which reduces the supply of sugarcane. “There is a lot of uncertainty about the hydrous ethanol market. With the reduction of taxes on fossil fuels, it is not clear how competitive ethanol will be”, says the professor to CNN.
“The increase in production could lead to an interesting supply in the domestic market, especially with the falling dollar, along with the international prices of a barrel of oil”, says economic consultant José Rita in an interview with CNN Brasil.
According to him, these are the ideal components to promote a practical effect in reducing prices for the consumer. “The tendency is for the economy to develop intensely and by the end of the year we will have a surprise with the drop in prices”, he adds.
Rita points out that, even with a super harvest, most of the impact on the market should fall on sugar, not directly impacting ethanol.
This Tuesday (16th) the main trends and news in the bioenergy sector will be announced at the 28th edition of Fenasucro & Agrocana, which will take place until Friday (19), in Sertãozinho, in the interior of São Paulo. This year’s edition will receive more than 40 thousand visitors, buyers from Brazil and 23 countries, which should promote R$ 5 billion in business.
In the accumulated crop, the drop is 7.42%, with a crushing of 282.79 million tons, against 305.45 million tons in 2021.
* Under the supervision of Diego Mendes
Source: CNN Brasil
I am Sophia william, author of World Stock Market. I have a degree in journalism from the University of Missouri and I have worked as a reporter for several news websites. I have a passion for writing and informing people about the latest news and events happening in the world. I strive to be accurate and unbiased in my reporting, and I hope to provide readers with valuable information that they can use to make informed decisions.
