(Updates with comment on rain in penultimate paragraph and extended length of season in last paragraph.)
Jan. 24 (Bloomberg) -- Sugar output in Brazil’s Center South, the world’s largest producing region, will climb to a record in the coming harvest as mills process a bumper crop, the world’s second-largest sugar trader said.
Output will increase to 35.5 million metric tons in the year starting April 1, up from 34.1 million tons a year earlier, said Luis Roberto Pogetti, chairman of Copersucar SA, the top sugar trader after Minneapolis-based Cargill Inc. Production of ethanol made from sugar cane will jump 24 percent to 26.5 billion liters (7 billion gallons) as a Brazilian government plan to raise the amount of biofuel added to gasoline encourages production, he said in an interview in Sao Paulo today.
“Ethanol will become profitable after the increase in the gasoline mix and we will respond to that,” Pogetti said. “Sugar is still profitable too, but mills are at the limit in terms of sugar capacity.”
Brazil, the largest ethanol producer and consumer after the U.S., plans to raise the amount of the biofuel blended into gasoline to 25 percent in June from 20 percent now, Energy Minister Edison Lobao said in a Jan. 17 interview. The South American country accounts for about half of world sugar exports.
Copersucar, based in Sao Paulo, shipped 5.1 million tons of sugar in the year through March 2012, or about 10 percent of global exports.
The Center South, which produces about 90 percent of Brazil’s sugar and ethanol, will harvest a record 580 million tons of cane in the coming 2013-14 season, more than the 570 million tons estimated on Sept. 4, Pogetti said. Output will rise from 531.3 million tons in the current crop year.
“Rains benefited the development of the newly planted fields, boosting crop yields in a way we didn’t expect,” he said. He estimates that mills will turn 54 percent of the cane into ethanol, a three-year high, up from 50.4 percent in the current crop.
Mills in the region will operate for about nine months in the coming season, up from an average of eight months in previous years, to process the record crop, Pogetti said. Mills are shut for maintenance after the harvest is over. Most mills are expected to start crushing their cane in April, he said.
--Editors: Carlos Caminada, Steven Frank