April 19 (Bloomberg) -- Sugar exports from Brazil, the world's biggest producer of the sweetener, may climb 13 percent in the year starting May 1 as soaring prices prompt suppliers to bolster output, the U.S. Foreign Agricultural Service said.

Brazilian sugar-cane output may increase 9 percent to a record 420 million metric tons in 2006-2007, Sergio Barros, an agricultural specialist with the service in Sao Paulo, said in a report yesterday. About 50.1 percent of Brazilian cane will be processed into sugar, compared with 48.6 percent in 2005-2006. The proportion of the crop used to produce ethanol will decline to 49.9 percent from 51.4 percent.

``From a strictly economic standpoint, sugar-ethanol plants should divert sugarcane crush towards sugar production for 2006- 2007, since the international prices are highly attractive,'' Barros said. ``Sugar export prices should remain highly attractive sustained by the steady increase in world demand.''

Sugar-cane farmers are trying to expand production after the commodity rallied to its highest in at least 25 years in February. Speculative buying of the sugar futures and expectations that Brazil will use more sugar-cane to make ethanol as an alternative to other chemicals in gasoline helped cause prices in New York to surge 116 percent in the past year.

Raw sugar for delivery in July jumped 0.67 cent, or 3.9 percent, to 17.94 cents a pound when last traded yesterday on the New York Board of Trade. The futures reached 19.3 cents a pound on Feb. 3, the highest closing price for the most active contract since April 1981.

Sugar prices are being buoyed by record-high crude oil prices. Crude for May delivery yesterday gained as much as $1.20, or 1.7 percent, to $71.60 a barrel on the New York Mercantile Exchange. That broke the record of $70.85 set Aug. 30 after Hurricane Katrina wrecked oil and natural-gas rigs, platforms and pipelines in the Gulf of Mexico.

Brazil will export the equivalent of 19.15 million tons of sugar in the year starting May 1, Barros said. That compares with an estimate of 16.97 million tons in 2005-06. Production is expected to rise 12 percent to 30.3 million tons.

To contact the reporter on this story: Jason Gale in Melbourne at j.gale@bloomberg.net

Last Updated: April 18, 2006 19:48 EDT