Tereos underpinned expectations of a further rise in Brazil's cane production in 2013-14 by saying that its own operations would enjoy a 10% increase in volumes, as the cereals-to-sugar giant unveiled a rise of nearly one-third in earnings.

The French-based co-operative, whose Guarani subsidiary it Brazil's third-ranked sugar and ethanol producer, said that its cane volumes in 2012-13 had risen by 12% to 18.2m tonnes.

That pace is ahead of the 8% production rebound achieved as a whole in Brazil's Centre South region, responsible for nearly 90% of domestic production, where Guarani is based.

And Tereos flagged "prospects of a further growth of more than 10% for the next campaign", which starts in April.

Ethanol vs sugar

This would be marginally behind the rate of increase of 11%, to 590m tonnes, in Centre South output as forecast by Unica, the Brazilian cane industry group.

However, Tereos appears, thanks to ties with Petrobas, well positioned to exploit a cane harvest of which an unusually large proportion, of 54%, is set to go to ethanol on Unica estimates, as a change to blending levels boosts domestic demand.

Brazil is from June to raise to 25%, from 20%, the amount of ethanol added to gasoline, the first increase in three years.

Petrobas, the Brazilian state-run oil firm, has a minority stake in Guarani, and has an ethanol distribution agreement covering 2.2bn litres over four years.

In 2012-13, 50.4% of Centre South cane has gone to producing ethanol, with the figure at 51.6% the year before.

With sugar prices declining close to the level of 17.5 cents a pound which, on Sucden estimates, it becomes more profitable to produce ethanol, a strong position in the biofuel may prove an advantage in best exploiting cane in 2013-14.

Beet performance

Tereos, whose Brazil sugar operations are listed in Sao Paolo as Tereos Internacional, said that in Europe, its Czech beet growers had enjoyed a strong 2012-13 harvest too, with "very high yields" of 79 tonnes per hectare.

That was only 2 tonnes below the record level of the previous season, acknowledged as a bumper year throughout Europe.

However, in France, yields fell to 84 tonnes per hectare from the all-time high of 96 tonnes per hectare the year before.

The group aims to raise average French yields to 110 tonnes per hectare by 2020.

Profits rise

Tereos reported a 32% rise to E313m in underlying earnings for the year to the end of September, on revenues up 14.2% at E5.04bn, a performance termed "outstanding" by Alexis Duval, the Tereos chief executive.

"This performance reflects a positive economic environment over the past year, as well as the benefits of our long-term strategy marked by a major industrial restructuring, our successful international expansion and the development of our product portfolio," he said.

The group has yet to reply to an Agrimoney.com question on its reaction to a European Parliament vote on Wednesday which throws into doubt plans by the European Commission to end quotas on the bloc's sugar beet production.

Tereos, historically the largest beneficiary of EU farm subsidies, has been seen as a major beneficiary of the quota system.