UPDATE 2-Dry weather trims Brazil sugarcane crop -gov't

Thu Sep 2, 2010 4:26pm GMT

 * 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.        
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
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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