UNICA: Sugarcane mills continue to prioritize ethanol production

By Erin Voegele | September 26, 2014

UNICA, the Brazilian sugarcane industry association, has announced that Brazil’s sugarcane processing operations are continuing to prioritize the production of ethanol over sugar.

Producing units in the country’s south-central region processed 39.89 million tons of sugarcane during the first half of September, a 15.98 percent drop compared to the second half of August. When compared to the volume processed during the first half of September last year, UNICA has reported a 7.44 percent drop.

UNICA reported that from the start of the season through mid-September, the Brazilian crush has totaled 412.68 million tons, up from 408.54 million tons during the same portion of last year. Sugar production, however, dropped significantly during the first half of September. Sugar production totaled only 2.5 million tons, down 17.09 percent compared to the final half of August. Only 43.99 percent of processed sugarcane went to sugar production during the first half of September.

“This drop in sugar production reflects the smaller crush during the period and the fact that mills have prioritized the production of ethanol,” said UNICA Technical Director Antonio de Padua Rodrigues in a statement, adding that market demand and current price levels have provided an economic incentive to produce the biofuel at the expense of sugar production.

According to UNICA, ethanol production from the beginning of the season through mid-September totaled 18.11 billion liters, up 4.82 percent when compared to the same period of 2013. During the first half of September, ethanol production totaled 1.96 billion liters, up from 1.88 billion liters during the same period of last year.

Ethanol sales by producing units in the south-central reach reached 1.05 billion liters during the first half of September, with 990.03 million liters destined to supply the domestic market and 57.36 expected to be exported. Domestic sales of anhydrous ethanol increased by 15.29 percent compared to the same period last year, with anhydrous ethanol sales increasing by 2.89 percent.

“The expectation is that this rise in consumption will become more pronounced in the upcoming periods since hydrous ethanol has presented itself as economically advantageous in relation to gasoline in the major consuming states,” Rodrigues said.

On Sept. 24, UNICA issued a statement focused on the impact of drought and fires on the Brazilian sugarcane harvest. The drought that has been impacting Sao Paulo state since the start of 2014 is estimated to have decreased the area to be harvested by 15 percent, with a loss of nearly 40 million tons of cane. According to the industry association, the Brazilian government has released figures that indicate 2,981 accidental or criminal fires have occurred in the state of Sao Paulo so far this year. That volume is 140 percent higher than during the same period of 2013.

In August, UNICA revised down the crush estimate for the 2014/2015 sugarcane season in the south-central region. The group now forecast that the crush will equal 545.89 tons, down 5.88 percent from initial projections and 8.57 percent lower than the previous season’s crush. Ethanol production is now expected to total 24 billion liters, down 6.14 percent from last year. As a result, ethanol exports are expected to decrease from last year, reaching only 1.2 billion liters for the current season. During the 2013-’14 season, approximately 2.57 billion gallons of ethanol were exported.