January 24, 2019 / 1:45 PM / a month ago

UPDATE 1-Brazilian ethanol holds edge against gasoline at pumps, says Unica

 (Includes report details, comments from Unica, tables)
    SAO PAULO, Jan 24 (Reuters) - Brazilian cane mills continue
to sell historically large volumes of ethanol in the market,
despite recent price declines for its competitor gasoline, and
the biofuel is expected to remain competitive in the
between-harvests period through April.
    Mills in Brazil's main center-south growing region sold 866
million liters of hydrous ethanol - the type that competes
directly with gasoline at pumps - in the first two weeks of the
year, 32 percent more than seen in the same period a year
earlier, according to cane industry group Unica.
    Brazil's sole refiner Petrobras has been reducing
gasoline prices at refineries in recent weeks following lower
international oil prices and the strengthening of the Brazilian
currency. That movement tends to squeeze profit margins for
ethanol.
    But Unica said mills have been able to continue to sell
large volumes.
    "Ethanol has held a share of around 30 percent of the market
for light vehicles' fuel in the last months," Unica's director
Antonio de Padua Rodrigues said in a report on Thursday, adding
that he sees the biofuel remaining competitive against gasoline
during the entire between-harvests period from now to April.
    Sugar market players are watching the situation in Brazil's
fuel market for signs of possible shifts in the production mix
in the new center-south crop that starts in April. If ethanol
loses its price edge against gasoline, demand will fall and
mills might divert more cane to sugar production instead of
ethanol in the new crop.
    Processing has basically ended in the center-south, with
only 7 cane mills still operating. Sugar production in the first
half of January was only 11,000 tonnes compared to 72,000 in the
previous two-week period. Mills crushed 524,000 tonnes of cane
in the period versus 2.41 million tonnes in the second half of
December, Unica said. 
        
    See below detailed figures from Unica's crop report for the
first half of January (cane and sugar in million tonnes, ethanol
in billion liters, total recoverable sugar-TRS in kg per tonne):
   
    
 BRAZIL'S CENTER-SOUTH - 1st HALF OF JAN (ANNUAL COMPARISON)
                 2017/18    2018/19    PCT CHANGE
 CANE CRUSH      0.166      0.524       214.58
 SUGAR OUTPUT    0.003      0.011         --
 ETHANOL OUTPUT  0.042      0.070        66.18
 TRS (kg/T)      104.86     103.53       -1.27
 CANE TO SUGAR   17.01 pct  21.89 pct  
            
 BRAZIL'S CENTER-SOUTH CUMULATIVE DATA - 2017/18 VS 2018/19
                 2017/18    2018/19    PCT CHANGE
 CANE CRUSH      583.41     562.68      -3.55
 SUGAR OUTPUT    35.83      26.35      -26.46
 ETHANOL OUTPUT  25.26      30.20       19.54
 TRS (kg/T)      137.36     138.61       0.91
 CANE TO SUGAR   46.93 pct  35.46 pct  
 Source: Cane Industry Group Unica

 (Reporting by Marcelo Teixeira)
  
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