Brazil sugar production up 55% in May; ethanol sales recover

By Roberto Samora and Marcelo Teixeira

SAO PAULO/NEW YORK (Reuters) - Brazil's centre-south region produced 2.5 million tonnes of sugar in the first half of May, up 55% from a year earlier, as mills continued to favor sweetener production over ethanol.

According to industry group Unica, mills allocated 47.2% of the cane to sugar production in the period, versus 36% a year earlier. But hydrous ethanol sales fell less than in April. They were 24% below last year's levels, compared to up to 50% below in the first weeks of a coronavirus-led quarantine.

Unica's technical director Antonio de Padua Rodrigues said ethanol has been priced competitively in the market, which has allowed the biofuel to gain share from gasoline at pumps.

In some states, such as Mato Grosso, ethanol price is near 60% of that of gasoline, he said.

Fuel sales in general seem to be recovering in Brazil as well, said a source at state-controlled oil giant Petrobras, adding that the fact has led to increased refinery runs.

The source said Petrobras refineries were working at 73% of capacity on Sunday, on average, a level that is similar to what was seen a year earlier.

Unica also said in the report that sales of sugar in the domestic market were up 4% this season compared to the previous, despite stay-at-home orders in some of the largest consuming areas.

Sugar exports were up near 50%, as production levels increased at similar levels.

(Reporting by Roberto Samora and Marcelo Teixeira; Additional reporting by Rodrigo Viga Gaier, in Rio de Janeiro; Editing by Franklin Paul and David Gregorio)