Sugar Output in Brazil’s Center-South May Be 35 Million Tons

By Thomas Kutty Abraham

Feb. 8 (Bloomberg) -- Sugar cane output in Brazil’s Center South, the world’s largest producing region, may be 35 million metric tons in the 2010-11 season, according to Cosan SA Industria & Comercio, the world’s biggest cane processor.

The region may harvest 590 million tons of cane next year, and crush 45 percent of the crop to make sugar, compared with 43 percent last year, Carlos Murilo de Mello, commercial director at Cosan, said in an interview today at a conference in Dubai.

Raw-sugar prices may trade at 26 cents to 30 cents a pound until the country’s new crop arrives, de Mello said. Futures for March delivery lost 5.3 percent to 26.17 cents in New York on Feb. 5, the most since Oct. 9, as the dollar rallied and stocks retreated last week as concern mounted that Greece, Spain and Portugal will struggle to curb their budget deficits.

“The market should remain strong in the next two-three months,” de Mello said. “The market is still constructive despite an increase in risk aversion emanating from the EU situation.”

Brazil’s sugar production may total 35.3 million tons in the 2010-11 season, up 4.4 million tons, as farmers increase planting to gain from record prices, Plinio Nastari, president of the research company Datagro, said at the same conference.

To contact the reporter on this story: Thomas Kutty Abraham in Dubai at tabraham4@bloomberg.net