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Surge In Sugar Output To Slow

02 June 2010

BRAZIL – Consistent growth in Brazilian sugar production may soon come to a rapid halt, a major financial services provider has said, warning that risks of weather setbacks could trigger a "significant rebound" in prices.

Output in Brazil, the world's largest producer, is expected to jump by ten per cent, to around 600m tonnes, in the 2010-11 season, but may not grow at all next year as the effects of an investment slump endure, Rabobank said yesterday.

Andy Duff, an analyst with the firm, noted that after several consecutive seasons of strong growth, the industry is now on the brink of decline.

He said: "The wave of expansion the sector has experienced in recent years is steadily fading," pointing out that just five new mills may go into production next year, compared with 30 three years ago.

Earlier this week, it was announced that Australia's sugar cane yield could be up to ten per cent up on last year, though actual sugar make may not see much improvement at all, due to last year's dry conditions and high sugar content.

TheCropSite News Desk

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