SAO PAULO/NEW YORK: Sugar production and ethanol exports increased sharply in Brazil in September as mills enter the final weeks of the current season, but the extremely dry weather started to hit cane agricultural yields, industry group Unica said on Friday.

Brazil's center-south sugar output reached 2.86 million tonnes in the second half of September, 59% more than in the same period a year earlier, as mills sharply favor the sweetener in their production strategies at the expense of ethanol.

Plants crushed 14% more cane in the period, or 40.22 million tonnes, with above-average dry weather boosting harvest pace.

However, Unica said the excessive dry climate has started to hurt agricultural yields.

Based on data from 90 mills in September, Unica said average yield was 71.97 tonnes of cane per hectare, 1.4% less than seen a year earlier.

"That is still preliminary data, but shows a change on what we have seen so far in the season," said Unica's technical director Antonio de Padua Rodrigues. Yields this year had been higher than last year all the way from the start of the crop in April.

Unica said ethanol exports increased 65% in September to 331 million liters, as mills take advantage of the weak currency to boost foreign sales.