Ethanol production in Brazil's Centre-South region is forecast to decline in the next three years amid an expected growing sugar shortfall on the global market, according to a local consultancy, cited by Reuters.

FG/AGRO told a conference in Sao Paulo last week that ethanol output in the country’s main sugarcane growing region was expected to decrease to 27.2 billion litres in the current 2016/17 crop season from 28.2 billion litres last season. At the same time, sugar production in the region is projected to reach 36.8 million tonnes, up from 31.2 million tonnes in the previous season, with sugar currently providing significantly higher earnings for mills than ethanol.

According to the consultancy, the 2019/20 harvest year will see ethanol production drop to as low as 23.1 billion litres and sugar production grow to 43.5 million tonnes, if sugar deficit expectations are confirmed and in the absence of big changes in gasoline taxes.

Reuters said most analysts predict sugar deficits of 4 million to 8 million tonnes for at least the next two years, with forecasts thereafter depending on the response of producing countries.


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