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By Nayara Figueiredo
SAO PAULO, April 3 (Reuters) – Tereos SA TEREO.UL, one of the world’s largest sugar and ethanol groups, is set to increase sugarcane crushing in Brazil by 10% in 2023/24, buoyed by a positive scenario for prices of the sweetener as the country kicks off a new season.
The France-based company expects to crush 19 million tonnes of sugarcane in Brazil this cycle, local Chief Executive Pierre Santoul told Reuters, leading to a total sugar output of 1.7 million tonnes, up 6.25% year-on-year.
“We will crush as much as we can into sugar,” he said in an interview on Friday.
Santoul said the firm could allocate more than 65% of its sugarcane to sugar production in the season, a similar level to that of last year, when it had already increased its sugar-ethanol production mix from the 62% seen in the previous year.
Tereos’ sugar production in the South American country accounts for more than a third of global group results in the sector, the rising production being backed by expectations that global prices will remain at a high level, Santol said.
Reasons for that include rising global demand driven by the United States, Africa and Asia, as well as shipment delays in Brazil, where sugar competes with a bumper grain crop for exports, the executive noted.
He also mentioned downward revisions for sugar output in Europe and drought-hit Thailand and India.
“The world needs an additional 7 million tonnes of sugar. Now the question is, where will this sugar come?” he said. “Brazil will respond to this demand, the production resumption in Brazil is very important”.
Santoul said making ethanol was still less attractive for Brazilian mills due to the positive scenario for sugar prices, but the jump in crushing would still lead Tereos’ output of the biofuel to reach 580 million liters this season, up from 480 million a year earlier.
(Reporting by Nayara Figueiredo; Writing by Gabriel Araujo; Editing by Chizu Nomiyama)
((Gabriel.Araujo2@thomsonreuters.com; +55 11 5047-3352;))
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