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Brazil’s sugar, ethanol output seen up in the new season – report

Brazil’s center-south (CS) region is expected to increase production of both sugar and ethanol in the new season that started in April, as fields partially recovered from the worst drought in 90 years last season, consultancy JOB Economia said on Monday.

It projected the CS sugarcane crop in 2022/23 at 558 million tonnes, 6.7% above 2021/22, while sugar output was seen at 33.5 million tonnes versus 32.1 million tonnes last year. Total ethanol output, including fuel produced from both cane and corn, was seen at 30.2 billion liters from 27.5 billion liters in 2021/22.

JOB’s chief analyst Julio Maria Borges said that weather conditions are near normal currently in the region and, if conditions remain adequate from now onwards, Brazil is likely to have an even better crop in next year.

“Mills have been taking good care of the fields. The higher production also dilutes their costs, so it is a positive outlook for them,” Borges said.

The consultancy expects mills to allocate a bit less cane to sugar production this season – at 44% versus 45% in 2021/22 – and more to ethanol as the fuel currently gives better financial returns following increases in energy prices.

Nearly 14% of total ethanol production expected in the season will be made from corn, a record, as more ethanol plants come on stream in the main Brazilian grain belt in the center-west region.

Brazil’s 2022/23 CS sugar exports are seen at 24.5 million tonnes versus 24.6 million tonnes in 2021/22, the consultancy said. Mills reduced sugar stocks after the poor crop last season, Borges said, so they would not be able to increase exports despite the better crop this year.
Source: Reuters (Reporting by Roberto Samora and Marcelo Teixeira; Editing by Aurora Ellis)

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