Brazil ethanol supply to tighten in 2011 on slow harvest

06 June 2011 20:34  [Source: ICIS news]

SAO PAULO, Brazil (ICIS)--Brazil’s ethanol supply will likely tighten in the coming months, market sources said on Monday, citing a slow start to the 2011-2012 sugarcane harvest in the centre-south.

The centre-south accounts for 90% of Brazil’s ethanol production. The sugarcane harvest in the area runs from April to November/December.

Market sources said ethanol supply was still ample, but continued strong demand for the biofuel could throw the market off balance in the inter-harvest months of January-March 2012, when centre-south mills will be mostly off line.

In addition, the sugarcane harvest was moving at a very slow pace and that could impact supply later in the year, a producer said on the sidelines of the 2011 Ethanol Summit in Sao Paulo.

The biennial event is organised by sugarcane group Unica, which represents most ethanol groups in the centre-south.

Sugarcane crushing by centre-south mills totalled 32.77m tonnes in the first half of May, down 6.7% compared with 35.13m tonnes in the same period last year, according to the latest crop figures from Unica.

The total amount of sugarcane processed since the start of the harvest on 1 April reached 56.66m tonnes on 15 May, or 39.51% below the 93.67m tonnes crushed in the same period during the 2010-2011 harvest, the group said.

Unica downplayed the drop, saying the year-on-year comparisons were skewed because the 2010-2011 harvest was “atypical”.

The last harvest was characterised by an early start as several mills began their activities in January-March, months that usually account for the inter-harvest period, the group said.

Brazil’s ethanol production for the 2011-2012 crop year will be almost flat from 2010, according to Unica, which predicted centre-south mills would churn out 25.51bn litres (6.74bn gal) of ethanol.

The figure represents an increase of around 0.5%, compared with the 25.38bn litres centre-south mills produced in the 2010-2011 harvest, the group said.

The 2011 Ethanol Summit runs Monday through Tuesday.

For more on ethanol visit ICIS chemical intelligence

By: William Lemos
+1 713 525 2653

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