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USA: BRAZIL SUGAR FORECAST CUT TO 27.8 MLN T; GLOBAL DEFICIT RISES -FCSTONE

Brazil’s center-south will produce less sugar than initially expected in the new season that started in April, as higher gasoline prices boost demand for cheaper ethanol, leading mills to allocate less cane to sugar, broker INTL FCStone said on Tuesday. FCStone cut its projection for sugar production in Brazil’s main producing belt to 27.8 million tonnes from 29.5 million tonnes expected in March. It said mills are likely to use only 37.1% of the cane in sugar production, compared to almost 40% projected earlier.

“Looking at prices for oil and sugar since early this year we see that oil rose 35% while sugar fell 5%,” FCStone said, adding that higher oil prices led to increasing values for gasoline in Brazil.