Rains in Brazil This Week May Threaten Sugar Output, ICAP Says

Rains this week in sugar-cane growing areas of Brazil, the world’s largest sugar producer, may threaten output this season, ICAP do Brasil CTVM said.

Sugar production in the Center South, the nation’s main producing region, is estimated at 30 million metric tons, Juliano Ferreira, a researcher at the Sao Paulo-based company, said today by e-mail. Between 30 millimeters and 130 millimeters (1.2 inches to 5.1 inches) of rain will fall in Sao Paulo state over the next five days, according to weather forecaster Somar Meteorologia. Average rainfall in the state in the whole of October is 150 millimeters, said Marco Antonio dos Santos, an agronomist at Somar.

“Rains in Brazil may result in sugar production falling below 30 million tons,” Ferreira said. “Yields could be reduced but the major impact would be from mills ending operations for the season earlier due to rains.”

Mills in the South American country are unable to crush cane when it’s too wet. Reactivating mills to process the remainder of the harvest would be “too costly,” Ferreira added.

The Center South cane harvest usually runs from mid-March to December. Production of the sweetener in 2010-11 was 33.5 million tons, data from industry group Unica show.

Rains would be beneficial for the development of the crop that will be harvested in the 2012-13 season, Santos said.

White, or refined, sugar for December delivery rose $26.30, or 4 percent, to $680 a ton by 5:28 p.m. on NYSE Liffe in London. Raw sugar for March delivery climbed 1.26 cents, or 5 percent, to 26.42 cents a pound on ICE Futures U.S. in New York.

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