Brazil hopes for bigger cane crop in 2012

Brazil\’s weather-ravaged sugar cane crop could rebound next year, helping the country begin to revive lagging ethanol production, an agriculture official said on Tuesday, but raising output to a comfortable level will take time and effort.

The world\’s top sugar producer has been unable keep output of cane ethanol biofuel in step with fast growing demand after adverse weather slashed yields and after mills recovering from the 2008 financial crisis slackened investments.

Secretary for production, Manoel Bertone said the main center-south cane belt could return to \”normal\” output of near 600-million tonnes next year if the weather played in its favor while the government studied measures to stimulate expansion.

Brazil aims to more than double the amount of cane it grows

by 2020 to keep up with huge demand for ethanol biofuel burned

pure in its pioneering flex fuel cars and needs mills to invest

urgently and aggressively to get there.

The government is considering stimulus measures to encourage mills to speed expansion including a cut in fuel tax on ethanol in some states to make it more competitive with gasoline, as well as tax credits generated by making ethanol.

Bertone said Brazil had not given up on its goal of commoditization of ethanol and creating a large international market for the fuel despite supplies falling short at home.

\”Brazil needs to increase cane production to balance both markets,\” he told reporters at the agriculture ministry when announcing a forecast for the current cane crop 8 percent smaller its previous estimate four months ago.

Brazil would have to import around 1.03 billion liters of ethanol this year to make up a shortfall of the biofuel,Bertone said, with around 580 million liters of that amount still to be delivered in the coming months.

Cane production for both the center south cane belt and the smaller northeastern cane crop, would reach a combined 589 million tonnes, down from 642 million tonnes forecast previously.

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