Brazil Cuts Sugar-Production Forecast as Dry Spell Limits Cane-Crop Gains

Sugar output in Brazil, the world’s biggest producer, will rise less than previously forecast this year as dry weather may hurt crops, the Agriculture Ministry said.

Brazilian mills will produce 38.2 million metric tons of the sweetener this year, less than the 38.7 million tons estimated on April 29, the ministry’s crop-forecasting agency, known as Conab, said today in an e-mailed statement. Production will climb from 33.1 million tons in 2009.

Below-average rain in the main producing areas of Brazil’s Center South through the end of August may reduce yields, Conab said. The La Nina weather pattern may extend the dryness through November, Conab said.

Mills will process 651.5 million tons of sugar-cane into sweetener and ethanol, less than the 664.3 million tons forecast in April and up from 604.5 million tons last year, Conab said. Ten new mills started operating in the current season, Conab said.

Mills will process 54.9 percent of their cane into ethanol and 45.1 percent into sugar, Conab said.

Ethanol output will increase 10 percent from last year to 28.4 billion liters (7.5 billion gallons), Conab said.

To contact the reporter on this story: Katia Cortes in Brasilia Newsroom at kcortes@bloomberg.net

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