Difficult Brazil sugarcane harvest conditions continue

By Kris Bevill | November 11, 2009
Report posted Nov. 25, 2009, at 2:10 p.m. CST

According to the Brazilian Sugarcane Industry Association (UNICA), sugarcane farmers in the country continue to struggle against wet harvest conditions and low sucrose content in the harvested crop. This has resulted in greater use of sugarcane for ethanol production over sugar production. During the first half of November, 56.55 percent of the total amount of cane processed had been used for ethanol production, yielding approximately 321 million gallons of ethanol.

UNICA said that Brazilian production of anhydrous ethanol has increased by 5 percent since October and now represents 36.2 percent of the country's total ethanol production.

The delayed harvest has impacted ethanol prices, and the increased price at the pump has resulted in reduced sales of hydrated ethanol, according to UNICA. Total hydrated ethanol sales were down 14.5 percent during the first half of November as compared to the first two weeks of October.

UNICA predicts that producers will still be able to make enough anhydrous ethanol to supply Brazil's 25 percent blend level into gasoline. "Variations in hydrated ethanol prices in the past weeks are seasonal oscillations, caused mainly by the impact of unexpected rains on harvest performance since June," the association stated. "The market has already begun to adjust, with demand for hydrated ethanol beginning to head downward in November."