Brazilian sugar and ethanol mills are likely to temporarily reduce sugar production volumes to increase ethanol production as a way to meet growing demand amid high prices for biofuel, said Plinio Nastari, analyst at Datagro. Nastari said during the Santander ISO Datagro sugar and ethanol conference that financial returns on sales of anhydrous ethanol, the type that is blended in gasoline have surpassed those from sugar, leading some mills to adjust their production strategy for the moment. Most mills in Brazil have the flexibility to adjust the production mix between sugar and ethanol, depending on the market for both. “At the moment, sales of anhydrous ethanol are giving better return than both domestic and export sugar sales, so we might see some mills postponing sugar production to increase ethanol volumes,” Nastari said. Ethanol prices in Brazil are near record levels, despite the opening of the harvest.
Source: Nova Cana (*Translated by Ia Niani)