Lower sugarcane yields push down Brazil ethanol production

24 November 2009 17:28  [Source: ICIS news]

HOUSTON (ICIS news)--Brazilian ethanol production continued to fall during the first half of November, pressured by lower sugarcane yields and increased sugar production, sugarcane industry association Unica said on Tuesday.

Unica said ethanol output in 1-15 November totalled 1.22bn litres, a 9% drop from a year earlier and a 1.6% reduction from 1.24bn litres in the second half of October.

The figures refer to production in Brazil’s centre-south region, which accounts for around 90% of the country’s ethanol production.

Brazil’s centre-south mills increased sugarcane crushing by 11% to 29m tonnes in 1-15 November but a drop in yields - caused by heavy rainfall - offset most of that increase, limiting the sugarcane production gain to 2.8% from a year earlier, the association said. The heavy rainfall helps the plant to grow but dilutes the amount of sugar that can be extracted from it

Lower yields also impacted sugarcane production in previous months. Centre-south mills crushed 471.5m tonnes of sugarcane from 1 April to 15 November, a 7.5% increase in volume that resulted in an output gain of only 0.5% for the period.

Unica uses April for comparison purposes because that is the month that coincides with the start of the sugarcane harvest in the centre-south. The harvest usually runs from April to December.

According to Unica, centre-south mills in 1 April-15 November produced 20.4bn litres of ethanol, a 5.5% reduction compared with the same period last year.

The drop is partly due to an increase in sugar production, which has reduced the amount of sugarcane that can be used to make ethanol.

Brazil’s ethanol market remains balanced despite the drop in output, Unica said, adding that it expects the country to have enough supply to continue meeting a mandated 25% gasoline blend requirement.

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By: William Lemos
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