Sao Paulo, Sept 24 - A jump in sugar prices in recent months has put most Brazilian mills back in the black but it is not enough to boost cane planting in the short term, the Sugar Cane Industry Association (Unica) said on Thursday.
Sugar futures have been hovering around their highest level in nearly three decades, at 20 to 22 cents per lb in New York.
But Brazilian sugar output this season has been selling, on average, at 16 cents per lb, Padua said.
"Of course 16 cents is higher than the historical average of 12 to 13 cents, but the (current futures prices) haven't been going straight on to mills' balance sheets," said Unica's technical director, Antonio de Padua Rodrigues.
"The process of recovery is slow," Padua said at a press conference to discuss Unica's revised forecast for the 2009/10 cane crop.
Several groups are still struggling against credit restrictions that began with the global financial crisis.
Moreover, ethanol prices haven't yet begun to reflect the rise in rates for sugar and only recently crossed the break even point to allow modest profits.
About 57 percent of the crop is going to ethanol production this season, with the remainder going to sugar. So cane prices are still below historical prices, Padua said.
The appreciation of the local currency, the real, against the U.S. dollar has also trimmed mills' gains in real, Padua said. This week, the real rose to its strongest level in a year.
"Companies are still paying debts. Ongoing investments are only for those projects started in 2006/07. We don't see any fresh investment."
Usually, a mill takes two to four years to become operational after its project is announced.