Low sugar futures prices have increased the production of ethanol in Brazil, according to the Brazilian Sugarcane Industry Association (UNICA). Although Rabobank has recently increased their sugar futures price forecast upward to an average 14.5 cents per pound for the last three months of 2018, Brazil continues to divert raw sugarcane volume away from the production of processed sugar and toward that of ethanol. Production of processed sugar in Brazil’s south central region, where 90 percent of sugar cane is produced, has increased during the first two weeks of March by only 1.7 percent year over year. Over that same period, ethanol production spiked by 13.2 percent to 161,000 liters, pointing to a stark diversion of sugarcane stocks away from the production of processed sugar. Sugar prices have now reached “ethanol parity”, or the price that processed sugar must fall to before ethanol production becomes a more lucrative option for mills. This year, the percentage of total production allocated to processed sugar during the first two weeks of March fell to 16.5 percent compared to the 24.1 percent recorded in 2017. As Brazil’s raw sugarcane processing changes, Gro Intelligence provides subscribers with the data and analytics necessary to stay ahead of the country’s sugar-ethanol production balance.