Ethanol demand spurs early start to Brazil crush

OREANDA-NEWS. Brazil's 2015/16 sugar cane harvest season is getting underway ahead of the official 1 April start date, with mills more optimistic about the outlook for the upcoming crop.

Recent rains in Sao Paulo state ended a prolonged drought and should help local cane recover yields in the 2015/16 crop.

Several mills, including Restinga and Clealco, have already begun crushing their new crops ahead of schedule. Restinga left a portion of the cane that could have been harvested late in 2014 in the field, and this will be the first to be harvested by the mill.

Clealco began harvesting in Sao Paulo in the second half of February.

Other mills plan to start crushing in April. They will not have the option of waiting too long to start if they are going to have sufficient time to crush the entire crop before rains resume in December.

The cane belt harvested 571mn tons of cane this past season, and by some forecasts the new crop could hit a record of more than 600mn tons.

Mills are starting early in order to meet additional demand for ethanol resulting from a higher blend.

Fuel distributors started blending 27pc ethanol in gasoline on 16 March, up from a previous 25pc.

The recent weakening of Brazil?s currency, the real, against the US dollar is also drawing more Brazilian ethanol to the export market. It is still too early to see the impact of the stronger dollar on export numbers but they should begin to show up in trade ministry data in the coming months.

The real has depreciated by nearly 30pc against the dollar since the start of 2014 and is now at its weakest in 11 years.

The sugar and ethanol industry association Unica said the increase in the blend will help mills recover from one of the worst crises in the industry's history.