Total Brazilian ethanol production increased 3% YoY at the end of July, according to latest UNICA data. Hydrous ethanol production has been increasing since the beginning of the year, rising 17% YoY at the end of July. The majority of this is going towards domestic consumption, with only 3% of sales exported for 2015/16 so far, down from 5% last year. Anhydrous ethanol production is down 16% on last year. Anhydrous ethanol exports are slightly more prominent, with 10% being exported in 2015/16, and 8% so far for 2015/16.
Ethanol production has become more attractive this year, with yield up to 43.5 litres of ethanol/ton of sugar, up 3% on 2014/15 level, whereas yield for sugar production from sugarcane is down over 10%. Scarcity of credit has left Brazilian ethanol producers struggling to maintain current stock levels. With Brazil in the middle of their sugar harvest season, this leaves fear that ethanol supply could fall short during the inter-harvest period, putting upward pressure on already exaggerated seasonal price spreads.