Investor Presentaiton
Sugarcane crushing in the mid-
southern region amounted to 590.4
million tons, up by 3.0% over the
573.1 million tons recorded during the
previous crop year. Total recoverable
sugar content (ATR) was 130.6 kg/ton
of sugarcane, the highest level since
2010/2011, which was fundamental
for achieving the record volume of
ethanol offered.
According to the Sugarcane Industry
Union (UNICA), the offer of biofuel in
2019/2020 crop year was 33.26 billion
liters 9.95 liters of anhydrous and
23.3 liters of hydrous ethanol - up
by 7.5% over the 30.9 billion liters in
2018/2019. In the face of low sugar
prices, 65.7% of the cane processed
was channeled to ethanol. In addition,
sales of hydrous ethanol stood at
23.02 billion liters, an increase of
7.08% over the previous cycle, while
sales of anhydrous ethanol grew
by 7.24%. The ESALQ average was
R$1,831/m³, 23% higher than the
average for 2018/2019, the highlight
being the strong appreciation in
the offseason.
The global sugar scenario showed
a surplus of 2.5 million tons, adding
more sugar to the market and raising
the inventory/demand ratio, which
resulted in a lower average monthly
price in September, of cUS$11.16/lb.
The end of the 2019/2020 crop year
saw prices in New York fall, with
a monthly average in March of
CUS$11.55/lb, reflecting the onset of
the coronavirus pandemic crisis.
As regards the energy market,
Brazil's hydrological situation in
2019/2020 was insufficient to reverse
the average of the previous six years,
with reservoirs approximately 35%
full. Notwithstanding the energy
surplus, the hydrological situation
triggered high volatility, maintaining
energy prices at higher levels similar
to previous years, with an average
Difference Settlement Price (PLD)
of R$204/MWh. For the next crop
year, with the prospect of economic
growth on the wane, the tendency is
for lower prices than those recorded
in recent years.
It is worth pointing out that energy
production from sugarcane biomass
rose by 4% in 2019 when compared
with the previous year. In the period,
22,407 GWh generated from bagasse
and straw were produced and offered
to the distribution network, capable
of supplying around 12 million homes
for a year. This total contributed to
avoiding 7.6 million tons of carbon
dioxide in 2019.
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