SAO PAULO/NEW YORK: Sugar output in Brazil's main production belt rose 37% in the second half of July year-on-year to 3.41 million tonnes, as mills held on to the strategy to maximize the sweetener's production at the expense of ethanol.

According to a report by industry group Unica on Tuesday, mills processed 50.47 million tonnes of sugar cane in the second part of July, 1.15% more than last year and slightly above market expectations for the period.

Ethanol production fell 10% to 2.39 billion liters. Despite the smaller production, ethanol stocks are 30% above levels seen last year, Unica said, since sales have been lagging 2019 volumes due to reduced mobility amid the pandemic.

July ethanol sales in the Brazilian market were still 13% below the amount sold in the same month a year earlier.

Mills enjoyed another very favorable two-week period for cane crushing, very dry conditions that sped up field work and increased sugar content in the plants.