The amount of sugarcane crushed in Brazil's key Center-South region in the second half 

of August is expected to total 41.95 million mt, up 8.7% on the year, an S&P Global Platts

survey of analysts showed Monday. 

The volume is however down 7% from two weeks prior, when 45.29 million mt was crushed. 

The 2017/18 sugarcane season started April 1 in the Center-South, the world's largest su

garcane and sugar producing region, and has already reached its peak. Industry associa

tion UNICA is expected to release its official production figures for the region this week. 

After a long dry weather spell ? the longest in four years ? analysts' estimate an average 

of 2.3 days of stoppage recorded due to rains and maintenance in H2 August. 

The wet weather is expected to have helped ethanol production, which combined with high

er ethanol prices than sugar should have translated into more of the sugarcane mix going

towards the biofuel production, says Claudiu Covrig senior sugar analyst at Kingsman, the

agricultural analysis unit of S&P Global Platts. 

"Ethanol has paid better than sugar for about a month and generally big mills only change

their mix after a longer period of constant profitability of one commodity or the other. This ti

me we think the sugar mix has finally dropped below 49% and expect it to come in at 48.9%

," said Covrig. 

The proportion of sugarcane directed to sugar production is expected to have slipped to 4

8.13% in H2 August, the survey showed, down from 49.72% the prior two weeks. 

Higher ethanol prices over the past weeks following rising PIS/Cofins taxes and a series of

upward adjustments of gasoline prices by Petrobras have increase the ethanol floor. Last

week S&P Global Platts assessed domestic hydrous hit a four-month high of Real 1,820/cu 

m ex-mill Ribeirao Preto, 

Hydrous ethanol has started paying more than sugar on August 4, and since then has only

been below sugar for two days, according to Platts data. The average premium stood at 53

as from August 4 to September 8, according to calculations by Platts. 

Hydrous ethanol output in H2 August was expected to have reached 1.043 billion liters, up

6.5% year on year, while anhydrous production should be 821.9 million liters, up 12% year 

on year. Anhydrous output has been higher than last year for the past four consecutive

fortnights, amid increasing gasoline consumption this year. 

Despite the increase in ethanol output in the past fortnight as of end-August, cumulative et

hanol production was expected to remain well behind last year, down 7% at 15.38 billion lit

ers, a four-year low, the survey showed. 

Considering the average poll results for crushing, the accumulated volume in the five mont

hs of the season (April-H2 August) is expected to have reached 384.56 million mt, down 3%

on the year, the survey showed. 

Despite that slip in crush volume, cumulative sugar production was expected to be almost 5

% higher than the same period last year at 23.55 million mt, as greater proportion of crush

ed cane has been directed to sugar production this season. 

Although there were a few days lost to rains the weather remained favorable for ATR levels.

The consensus for cane's total recoverable sugar, or ATR, was 146.9 kg/mt in H2 August, w

ith a wider range of 143-149.4 kg/mt. That compares with 145.07 kg/mt a year ago and 146

.29 kg/mt in H1 August.