Tereos’ Brazil branch revising sugar outlook after rains

Guarani SA is revising its forecasts for Brazil’s sugar and ethanol production for the 2013/14 season because of recent rains and lower sugar prices, the Brazilian branch of French group Tereos Internacional SA said on Friday.

Wet weather held up cane crushing in Brazil’s center-south in the first half of June, according to cane industry association Unica. When crushing is delayed, mills generally produce more ethanol because the amount of recoverable sugar falls.

“We are revising our estimate for the mix, which we initially had at 60 percent sugar and 40 percent ethanol,” said Guarani’s Executive President Jacyr Costa Filho on the sidelines of Brazil’s Ethanol Summit in São Paulo.

Guarani, in which state-run oil firm Petrobras has a 46 percent stake, expects to crush 21 million tonnes of cane this season versus 18.2 million tonnes the year before.

Costa Filho said if sugar prices remain low, mills would have another reason to favor ethanol production. Spot ICE raw sugar futures hit their lowest price in three years on Friday.