Indian sugar mills association

Global sugar deficit to hit brazil ethanol production

Date:	30 Jun 2016

Source:	The Economic Times

Reporter:	Marcelo Telxiera

News ID:	5721

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Brazil's centre-south ethanol production should fall in the next three years if projections for growing global sugar deficits are confirmed, a local sugar and ethanol analyst said.

Brazil's main centre-south cane belt should produce 27.2 billion litres of ethanol in the current crop (2016-17) compared to 28.2 billion litres in the previous season, said FG/AGRO consultancy during a presentation at NovaCana Ethanol Conference in Sao Paulo.

In contrast, it sees centresouth sugar production growing to 36.8 million tonnes from 31.2 million last crop, as mills allocate as much cane to sugar production as their industrial installations allow, as they react to a global deficit in the sweetener.

If projections for sugar deficits are confirmed, and there are no major changes in gasoline taxes, FG/AGRO estimates ethanol production will fall to as low as 23.1billion litres in the 2019-20 crop year, while sugar output would climb to 43.5 million tonnes.

"The difference in earnings for mills between ethanol and sugar is big in favour of sugar, and it seems that it will only get bigger," said Willian Hernandes, partner at FG/AGRO.

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