Washington, 1 Oct - Brazil sugarcane production is forecast at 555 million metric tons in 2008/09, up 64 million tons from the prior year, with nearly 60 percent of the crop being used for ethanol production, a U.S. Agriculture Department attache in Sao Paulo said on Tuesday.
The attache said 330 million tons will be used for ethanol and 225 million tons targeted for sugar production. Area harvested was estimated at 7.4 million hectares (18.3 million acres), up from 6.5 million (16 million acres) in 2007/08.
"Industry has steadily diverted an increasing share of sugarcane toward ethanol production due to strong domestic demand for the product and less attractive sugar prices," the attache said.
Total ethanol production in 2008/09 was estimated at 26.85 billion liters, up 4.46 billion liters from previous marketing year.
Ethanol exports in 2008/09 are forecast at 4.8 billion liters, up 1.17 billion liters from 2007/08. The attache said more than 3 billion liters should be exported to the United States. The marketing year begins in May.
"For several weeks following this year's Midwest floods crop fears lead to high corn futures prices," the attache wrote. "That window of high corn prices made Brazilian ethanol price competitive, even with the payment of the US$ 0.54/gallon import duty."
Sugar production for 2008/09 was estimated at 32.45 million tons, raw value, similar to the previous year's 32.1 million tons. Sugar exports for the 2008/09 marketing year were forecast at 20.25 million tons.