Sugar Output in Brazil Rises After Rainfall Abates

Sept. 11 (Bloomberg) -- Sugar output in Brazil's Center South, the world's biggest-producing region, rose 2.6 percent in the second half of August after dry weather let growers step up the harvest.

Mills in the region, which account for about 90 percent of Brazil's sugar output, produced 2.4 million metric tons in the period, the Center South Sugar and Ethanol Industry Association said today in a report. Output rose from 2.33 million tons a year earlier, said the group, known as Unica.

The region's mills produced sugar and ethanol at full speed in the second half of August after rains that had hampered harvesting in previous weeks eased, Unica said. Growers harvested 38.4 million tons of sugar cane in the second half of August, up 10 percent from a year earlier.

``Weather conditions in the Center South favored harvesting,'' Unica said. ``Producers resumed crushing at full capacity.''

Ethanol output jumped 19 percent to 1.94 billion liters (511 million gallons) from 1.63 billion liters in the year- earlier period, Unica said. Average sugar yields in the second half of August were 6.7 percent lower than a year earlier, at 62.4 kilograms (138 pounds) per ton of cane.

For most of the current season, which usually runs from April to November, above-average rainfall led growers to slow harvesting because humidity pares sugar-cane yields. Mills have also focused on turning cane into ethanol after demand in the U.S. and Brazil, the biggest consumers, pushed up prices.

Year to Date

This year through the end of August, sugar production fell 4.4 percent to 14.8 million tons, while ethanol output climbed 15 percent to 13.3 billion liters. Average sugar yields have slumped 12 percent to 52.4 kilograms per ton of cane.

Mills will turn 60 percent of their cane into ethanol and the remainder into sugar during this season, up from 56 percent ethanol last year, Unica said on Sept. 2. Unica expects growers and mills to extend the season through December to partly make up for the reduced activity in past months.

Of the 32 new mills Unica expected to come online this season, 20 are operating. Unica said it expects nine more to start up later this month, while the remaining three have postponed the beginning of operations until next year.

Sugar futures for March delivery fell 27 cents, or 1.9 percent, to 13.61 cents a pound in New York, paring this year's gain to 26 percent. Sugar was the best-performing commodity this year on the Reuters/Jefferies CRB Index of 19 raw materials.