March 14 (Bloomberg) -- Brazil, the world's largest producer of ethanol made from sugarcane, may increase the amount of the biofuel that must be blended into gasoline by May.

The government will begin talks next week that may lead to boosting the mandate to 25 percent from 23 percent now, said Angelo Bressan, head of the Agriculture Ministry's sugarcane and biofuels department. Bressan expects the change to be implemented by May, when Brazil's ethanol mills will be running at full capacity.

Brazil's sugarcane farmers are expected to harvest a record crop this year. Ethanol output may rise to as much as 20 billion liters (5 billion gallons) from about 18 billion liters in the previous crop, Bressan told reporters in Sao Paulo today.

Use of the biofuel in Brazil may rise to as much as 15 billion liters this year, from about 14 billion liters last year, he said. The amount may jump to 30 billion liters as early as 2013, Bressan said.

By 2015, so-called flex-fuel cars that can run just on ethanol, gasoline or any blend of the two will represent 70 percent of the country's light vehicles, up from about 15 percent now, Bressan said.

To contact the reporter on this story: Carlos Caminada in Sao Paulo at at ccaminada1@bloomberg.net

Last Updated: March 14, 2007 13:53 EDT