The strong tail to Brazil’s cane crushing season is proving even more productive than investors had expected, allowing mills to achieve a year-on-year rise in sugar output for the first time in 2022-23.

Mills in Brazil’s Centre South region, responsible for some 90% of the country’s sugar output, processed 26.34m tonnes of cane in the first half of this month – double the volume crushed in the same period of last year, data from industry group Unica showed.

With cane quality a little higher year on year, and mills allocating more crop to making sweetener rather than ethanol, sugar production rose for the period even faster, by 162% to 1.67m tonnes.

That lifted the total for sugar production in 2022-23, as started in April, to 31.97m tonnes, exceeding for the first time the cumulative output for last season, which saw mills produce 31.87m tonnes of the sweetener as of mid-November.

Ahead of forecasts

The performance far exceeded the expectations of analysts, who had expected mills to report cane processing of 23.94m tonnes in the first half of this month, and 1.48m tonnes of sugar output, according to a poll by S&P Global Commodity Insights.

The extent of the crush reflected the number of mills remaining open into what is usually a quiet period for crushing, bringing seasonal rains which encourage shutdowns until the new season starts in April.

In fact, less than half mills have closed, with 140 still operating as of mid-November, Unica said, reporting that 118 had closed.

Last year, only 65 mills were still working as of November 16.

Late flourish

The late flourish in the Centre South crush reflects a delayed start to the processing season, with many mills holding back their start to their cane harvest, to allow a greater recovery in a crop damaged by drought and frost last year.

Data from Brazil’s sugarcane technology centre shows that last month the Centre South cane yield averaged 66.9 tonnes per hectare, up by 22% from the 54.9 tonnes per hectare achieved in October 2021 following the frosts.

Meanwhile, sugar output has received an extra boost this season from a relatively high price of the sweetener compared with ethanol, which has encouraged mills to alter their cane allocations.

S&P Global estimated at 15.94 cents a pound the value, in sugar terms, of making ethanol from cane as of the start of this week, although Cbios environmental credits add roughly 0.60 cents to this figure.

The New York March raw sugar contract closed on Wednesday 19.55 cents per pound.

Trading in raw sugar was closed on Thursday for the US Thanksgiving holiday. In London, white sugar futures for March settled up 0.8% at $539.10 per tonne.

Ahead of long-term forecasts

Mills’ bumper start to November means that cumulative Centre South cane crush for 2022-23 of 516.8m tonnes, while still narrowly behind the year-ago pace, has already exceeded the expectations of some analysts for the full season.

Conab, Brazil’s official crop bureau, was expecting a Centre South crush of 514.5m tonnes for the whole of 2022-23.

The cumulative sugar production total of 31.97m tonnes is also ahead of the Conab full-season forecast.