Brazil's Sao Martinho sees 8.5 pct fall on recoverable sugar in 2015
SAO PAULO Nov 9 (Reuters) - Brazil's sugar and ethanol producer Sao Martinho SA saw a decrease of 8.5 percent in total recoverable sugar (ATR) in the first half of the 2015/16 cane crop, confirming earlier indications of lower yields this year amid higher humidity.
The fall on ATR, as the productivity indicator is known locally, led to smaller sugar and ethanol outputs in the period, even with crushing volume similar to that seen in the previous comparable period.
Sao Martinho said in an earnings report on Monday that it crushed 15.03 million tonnes of cane in the six months to September 30, 0.8 percent less than in similar period in 2014. Sugar output fell 3.5 percent to 952,000 tonnes.
The average sugar content per tonne of cane was 7.8 percent smaller. But the company said it will compensate smaller ATR with higher crushing volumes, likely extending operations into between-harvests period.
The company posted a net profit of 21 million reais ($5.52 million) in the quarter ended in September, 82 percent less than a year earlier, saying the local currency weakness increased costs do service dollar-denominated debt.
Sao Martinho said it hedged for 695,000 tonnes of sugar in the current crop, at an average price of 15.61 cents per pound.
For the new crop (2016/17), which starts in April, the company said it had hedged 340,000 tonnes of sugar at average of 13.52 cents per pound. The volume is equivalent to 25 percent of estimated annual output.
As of September 30, Sao Martinho had 33 percent more sugar stocked compared to last year.
"The increase in sugar stocks is a result of our strategy to carrying sugar to October/15 and March/16 screens (futures positions in New York), due to better prices on those contracts," said the company in the earnings statement.
(Reporting by Marcelo Teixeira)
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