May 18, 2021
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SAO PAULO, May 18 (Reuters) - The Brazilian government expects sugar production from the main center-south region to fall 6.4% compared to the previous crop to 35.8 million tonnes, saying insufficient rains hurt sugar cane development.
Conab, the agency in charge of agricultural estimates, said on Tuesday that center-south sugar cane crushing is likely to fall 4.6% in 2021/22 to 574.8 million tonnes, the smallest volume since 2018/19.
The agency projects ethanol output -- including fuel produced from both corn and sugar cane -- to fall 7.4% to 28.36 billion liters.
The volume of the biofuel would fall more if not for the increase expected from corn-based ethanol production, which Conab sees growing 500 million liters to 3.5 billion liters in 2021/22.
The projections are mostly in line with independent analysts.
Brazil's drier-than-normal weather since late last year has hurt production of sugar, coffee and corn. It is a major factor supporting raw sugar futures which are hovering around the highest levels in four years.SOF/LSBc1
Conab said planted area with sugar cane fell 2.4% this year to 7.5 million hectares.
The agency said cane has lost area to grains such as corn and soybeans, which have been giving even higher returns to farmers in the last years.
(Reporting by Carolina Mandl and Roberto Samora; Additional reporting and writing by Marcelo Teixeira in New York; Editing by Cynthia Osterman)