Sugar production in Brazil's Centre South cane belt will ease slightly this season, as falling area in the top growing state of Sao Paulo outweighs a shift toward sugar, and away ethanol, officials said.
In its first forecast for the 2017-18 season, the Brazilian crop supply agency Conab forecast cane production in the Centre South to fall by 2.4%, to 598m tonnes.
"Even taking into account better climatic conditions, the fall in planted area in the main Centre South producing states will result in a smaller cane production," Conab said.
The fall in production was driven by a fall in planted area, particularly in Sao Paolo.
Conab cited "the low renewal of crops, combined with last year's climatic problems such as drought and frost, and the return of leased land by some production units, in the face of financial difficulties" as driving the drop in plan tings.
But sugar production will fall only slightly, by some 60,000 tonnes, Conab said, as mills favour sugar over ethanol relative to last year to 35.46m tonnes.
This shift resulted from "favourable sugar prices that encouraged the production of this commodity to the detriment of ethanol".
Ethanol output in the Centre South is seen at 24.75bn litres, compared to 26.2bn litres in the previous season.
Conab's forecast compares to a forecast from Job Economia last week, which saw the Centre South cane crop at 593m tonnes.
Job Economia saw the Centre South sugar output over the same at 36.6m tonnes, up some 1.3m tonnes year-on-year.
Conab forecast total sugar production in Brazil at some 38.70m tonnes.
By William Clarke