Sao Paulo, 21 September (Argus) — Brazil`s ethanol exports this season are expected to ramp up 50pc over the last harvest`s levels, as increased rainfall across the cane belt improves sugarcane crop volumes if not quality, according to the latest forecast from Unica, the country`s leading cane and biofuel industry association.

Unica sees ethanol exports reaching 2.55bn l during the current season, up from an April estimate of 1.7bn l. Center-south ethanol exports between April and August were 1.319bn l, compared to just 860mn l during the same period of the last crop.

Overall, the group has boosted its Brazilian sugarcane crop forecast for 2012-13 by nearly 2pc to 518.5mn t, up from its previous estimate of 509mn t issued in April. If Unica`s projection is confirmed, the April 2012 to March 2013 crop will be 5pc larger than the 2011-12 crop, which totaled 492mn t.

Despite the expected increase in cane output from the key center-south region, Unica lowered its ethanol production estimate by 2pc. Even though harvested cane volumes are rising, the quality of that cane is falling. Unica now projects that 21.05bn l (132.4mn bl) of ethanol will be produced during the 2012-13 season, down from 21.48bn l last season due to a reduction in recoverable sugar levels from the cane.

The average recoverable sugar level of the center-south cane will reach 135.4 kg/t, down from its April estimate of 140kg/tons, according to Unica`s new report. If the forecast proves true, the center-south harvest's recoverable sugar level will fall below the 137.54kg/t seen last season.

"The increase in the size of the cane crop was not large enough to compensate for the decline in the quality, which means that total sugar and ethanol production will be smaller than our April projection," Unica interim president Antonio de Padua Rodrigues said.

Even though there will be a dip in ethanol output from center-south mills, Unica has increased its estimate of anhydrous ethanol production by 19.4pc to 8.3bn l, up from 6.95bn l in April. Mills in the region are favoring anhydrous production, which is used as a fuel additive and is being exported, with significant volume reaching the US. Production of hydrous ethanol – used in domestic flex-fuel vehicles – is now seen reaching 12.75bn l, down 12pc from an April estimate of 14.5bn l.

Brazilian mills are using 49pc of the cane for sugar production and 51pc for ethanol production, in line with the previous harvest.

Rodrigues said the government needs to define the ethanol blend for the 2013-14 crop soon, so mills can plan for the upcoming harvest.

The blend was lowered from a 25pc biofuel mix in gasoline (E25) to a 20pc (E20) mix last October, as drought and falling cane yields limited the feedstock for ethanol and sugar production. The blend could be raised back to 25pc under current law.

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