Sugar output in Brazil's main center-south cane producing region will rise to record volume this season, despite a drop in yields caused by dry weather in 2010, the government crop supply agency Conab said Tuesday. But ethanol output is expected to fall as mills favour sugar production in search of higher returns, Conab said, in its first estimate for the new season (April-March).
Sugar production is forecast at 35.9 million tonnes, up from a revised output of 33.6 million tonnes in 2010/11. Prices of the sweetener fell by about a third after notching up a 30-year high in February but most mills took advantage of the high prices last year and sold substantial volumes.
Conab sees the amount of cane going to sugar production rising 7.5 percent from that seen last season while the amount of cane going to ethanol is expected to fall 2 percent. As a consequence, output of the biofuel should drop to 24.9 billion liters, from 25.6 billion liters last season in the center-south.
Mills in the region are expected to crush a record 573.1 million tonnes, up from a revised 560.6 million tonnes in 2010/11, mainly due to an expansion in the harvesting area since the volume of cane per hectare is seen falling. Average agriculture yields in the center-south are expected to fall to 78.5 tonnes per hectare, down 3 percent from 2010/11. Cane area in the region was estimated at 7.3 million hectares, up 5.4 percent from last season.
"The development of cane is behind that seen (at this time) last season as a consequence of the adverse weather from April through November 2010," Conab said in a report. But new cane areas, which have a higher productivity, should contribute to trim the expected reduction in yields. Conab said five new mills should come on line this season, after nine started to operate in 2010. Conab also said excess rains in the first months of the year delayed planting of new areas, which "could have consequences to future production," in 2012.
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