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Rains stall rise in Brazil sugar output

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Sugar production in Brazil's key Centre South district slowed for the first time this season as showers slowed the cane harvest, industry group Unica said, restating a caution of a more serious slowdown ahead.

Mills in the Centre South, responsible for some 90% of Brazilian sugar output, produced 2.55m tonnes of the sweetener in the first half of this month, down 30,000 tonnes on output in the last half of June, Unica said.

The decline, while small, represents the first slowdown in a 2014-15 season which has been marked by a rapid pace of cane harvesting, which entered July up 11.1% year on year, accelerated by dry weather - which has raised concerns over yields.

Sugar output has been further supported by an increased diversion of what cane has been harvested to the sweetener, rather than to ethanol. The proportion going to sugar so far in 2014-15 is, at 43.6%, up 1.1 points year on year.

Lower yields, but more crushing

Centre South cane crushing volumes, at 41.3m tonnes in the first half of July, were down 6.4% on those in the second half of June, and down 3.9% year on year.

The decline was down largely to rains in the south of Sao Paulo, the top cane growing state, the north of Parana and a "good part" of Mato Grosso do Sul, Unica said, amid talk that the rains are proving a setback to coffee growers too, in prompting premature flowering.

Nonetheless, mills, with 244.4m tonnes of cane crushed so far this season, remain 8.3% ahead of last year on their processing pace – despite weaker yields of the crop, implying "a considerable advancement in harvested area", the industry group said.

Cane yields have been hurt by undue dryness for most of 2014, and while some producers are seeing improved results this year, others "are showing annual drops of more than 20%", Unica technical director Antonio de Padua Rodrigues said.

'Many doubts'

The group restated ideas that cane production will suffer an unusually early seasonal decline, thanks to the extent of cane already harvested, and as mills turn to more damaged, or even immature, crops.

"In the Centre South, the expectation is for the reduction in yield to accentuate in the coming months, due to harvesting of sugar cane less than 12 months' old, and in areas most affected by the prolonged drought," Mr Rodrigues said.

Indeed, fears for a tail-off in output were behind the elevated diversion of cane to making sugar, rather than ethanol.

"It is natural that companies take advantage of the current period, when cane quality is at its best, to produce the sugar necessary to meet future commitments," Mr Rodrigues said.

"Nobody wants to run the risk of not being able to produce the sugar already contracted to, as there are many doubts about the harvest for the coming months."

By Agrimoney.com

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