SAO PAULO, June 28 (Reuters) – Sugarcane crushing in Brazil’s center-south region fell short of market estimates in the first half of June despite a slight increase over the same period last year, data provided by industry group Unica showed on Tuesday.
Crushing totaled 38.6 million tonnes in early June, up 5.76% from a year earlier but below market expectations. Analysts surveyed by S&P Global Commodity Insights had projected it to reach 42.2 million tonnes.
Crushing in the 2022/23 crop so far has dropped 12.71% on a yearly basis as adverse weather conditions affected production in the states of Mato Grosso do Sul and Parana, Unica said in a statement.
Sugar output reached 2.14 million tonnes in early June, a 3.8% drop, while ethanol production was up 6.31% to 1.82 billion liters. Both output figures were below forecasts.
Analysts had estimated sugar production at 2.4 million tonnes and sugarcane-based ethanol output at 2.07 billion liters, according to S&P.
The sugar production drop reflected lower raw material quality, Unica’s technical director Antonio de Padua Rodrigues said, adding that total recoverable sugar content is now expected to fall by more than 3 kg per tonne this year.
He also noted that mills have prioritized ethanol production over the sweetener this year.
According to Unica, roughly 55.6% of crushing was allocated for biofuel production in early June, in line with expectations and above the 53.7% seen a year earlier.
S&P had noted that despite a wide range of estimates overall, the market had a consensus that Unica’s data would show the production mix still favoring ethanol year-on-year.