UPDATE 2-Dry weather trims Brazil sugarcane crop -gov't
* Current crop sugar output seen 38.15 mln tonnes
* Cane output 651.5 mln T vs 664.3 mln T in April
* Dry weather seen affecting yields for this and next crop
(Recasts, adds background, table, graphic)
By Reese Ewing
SAO PAULO, Sept 2 (Reuters) - Dry weather prompted the Brazilian government on Thursday to lower its forecast for the 2010/11 sugar crop, and it is likely to hurt next year's rcop yields as well.
Brazil's 2010/11 cane crop is expected to put out a record 38.15 million tonnes of sugar, slightly down from the 38.7 million tonnes forecast in April, the government's crop supply agency Conab said.
The total cane crop was projected to decline from the 664.3 million tonnes estimated by Conab in April, although the new forecast of 651.5 million tonnes would still be a record.
Dry weather over the main center-south cane belt which is in full harvest has allowed mills to make progress crushing this season but is limiting growth of the cane.
"The climatic conditions signal there will be losses to yields at the end of the harvest (Nov-Jan)," Conab said in its crop report. "Due to the dry weather, it's already possible to forecast losses to the next crop, stemming from the limited growth of the cane that will clearly be smaller in size and affect yields."
The current cane crop estimate, if confirmed, would still be up 7.8 percent from the 604.5 million tonnes crushed in 2009/10. And the expected sugar output from it should be up 15.4 percent from the 33.1 million tonnes produced last season, Conab data showed.
The smaller northeast cane crop was partially hit by flooding in June but the negative effect on the region's output is not expected to be substantial.
Ethanol output from the current crop is seen amounting to 28.4 billion liters, slightly off the April forecast of 28.5 billion liters but still up 10 percent from the 25.8 billion produced from the previous crop.
Conab said that 45.1 percent of Brazil's industrial cane crop would be destined for the production of sugar while 54.9 percent of it would go to ethanol production.
With sugar futures prices firm, SBc2 mills have been producing sugar at near capacity. Mills have the option of shifting some production annually toward ethanol or sugar depending on which offers better returns.
Graphic of Brazil cane, sugar, ethanol output:
Below is a table of Conab's latest forecast of the cane, sugar and ethanol output broken down for the entire and center-south crop, which accounts for about 90 percent of the country's total cane crop.
BRAZIL'S TOTAL CANE CROP CROP 2010/11 2009/10
Sept Fcst April Fcst CANE 651.5 MLN TNS 664.3 MLN TNS 604.5 MLN TNS SUGAR 38.2 MLN TNS 38.7 MLN TNS 33.1 MLN TNS ETHANOL 28.4 BLN LTR 28.5 BLN LTR 25.8 BLN LTR ..............
MAIN CENTER-SOUTH CANE CROP CROP 2010/11 2009/10
Sept Fcst April Fcst CANE 583.6 MLN TNS 596.2 MLN TNS 542.8 MLN TNS SUGAR 33.3 MLN TNS 33.7 MLN TNS 28.7 MLN TNS ETHANOL 26.1 BLN LTR 26.3 BLN LTR 23.7 BLN LTR
(Editing by David Gregorio)
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