Brazil’s State Sugar Mills Seen Extending Crushing Into December

Sugar mills in the state of Sao Paulo in Brazil, the world’s largest producer of the commodity, will probably extend cane crushing into December after rains earlier this year delayed the harvest, according to Cepea.

Mills usually end the season in late November, Heloisa Lee Burnquist, an analyst at Cepea, a University of Sao Paulo research group, said in a report yesterday. Rainfall in producing regions last week resulted in mills slowing cane crushing again, she said. The wet weather may once again slow mills and port operations, broker and consultant SA Commodities in Santos, Brazil, said in a report e-mailed yesterday.

“Due to the late beginning of the 2012-13 crop, mills may extend activities,” Burnquist wrote in the report. “Players are concerned with the sugar amount available for trades in the spot market, since mills have contracts to accomplish in both domestic and international markets.”

Dry weather in the second half of October allowed the harvest to advance and narrow the output difference in relation to the previous year. Sugar cane processing in Brazil’s center south, the country’s main growing region, totalled 455,557 metric tons from the start of the 2012-13 crop through Oct. 31, data from industry group Unica showed. That is 1 percent down from the same period a year earlier. For the season through Oct. 15, the cane crushing was down 4 percent, according to the data.

Sugar prices in Brazil’s domestic market slid 2.3 percent to 49.66 reais ($24.25) a 50-kilogram (110 pounds) bag in the week ended Nov. 9. Sales in the domestic market were 1.1 percent more profitable than exports, 29 percent more advantageous than sales of anhydrous ethanol and 36 percent more lucrative than hydrous ethanol, according to Cepea. Anhydrous ethanol is used to blend into gasoline. The hydrous variety is used in flex-fuel cars.

Raw sugar for March delivery slid 0.5 percent to 19.27 cents a pound by 4 a.m. on ICE Futures U.S. in New York.

To contact the reporter on this story: Isis Almeida in London at Ialmeida3@bloomberg.net

To contact the editor responsible for this story: Claudia Carpenter at Ccarpenter2@bloomberg.net.

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