Brazil projects slower sugar production in light of ethanol increase, heavy rains; sugar price expected to rise up to 26 percent

In Brazil, the Conab crop-forecasting agency of the Agriculture ministry projected that sugar production for the coming 08/09 season will increase by 4.7 percent over last year’s harvest, but less than expected after heavy rains and a higher conversion rate of sugarcane to ethanol. The agency had previously forecast production of 33.8 – 35.2 million tons, and has reduced the forecast to 32.8 million tons. Observers projected that sugar prices would rise 26 percent because of the drop in production, coupled with a drop in Indian production.

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