July 25, 2012 / 5:53 PM / 5 years ago

UPDATE 1-Brazil's sugar mills at full throttle in early July

(Adds further details, cane crush numbers)

July 25 (Reuters) - Brazil's center-south cane mills kicked into high gear in early July after rains receded, producing more sugar and ethanol than a year before for the first time this season, the milling industry association Unica said on Wednesday.

Although cumulative sugar output since the start of crushing in April remains 22 percent behind last year, mills churned out nearly a third of the total sweetener produced so far this season in the first two weeks of July, Unica said.

Mills in Brazil's main center-south cane region produced 9.32 million tonnes of sugar since April, down 22 percent from a year ago, while sugar output reached 2.63 million tonnes in the first two weeks of July, up 2 percent from a year ago.

"For the first time this crop, crushing in the fortnight surpassed that registered over the same period a year ago," Unica's technical director and interim president Antonio de Padua Rodrigues said in Unica's biweekly report.

Cane crushing and the output of anhydrous ethanol, as well, were up for the first time in early July against a year ago, as rainy weather in May and June let up and more mills accelerated harvesting.

The unseasonably wet weather has stirred talk among experts in the sector about the potential for some of this crop's cane being stranded in the field until next season, as mills struggle to get through the harvest by the time spring rains return late in the year.

Ethanol production since April totaled 6.42 billion liters, down 26 percent from a year ago, as mills continue to favor sugar production in the allocation of the cane that they harvest.

Unica said that mills on average sent 50 percent of the cane crush to sugar production in early July, up from 49 percent this time last year. This is up from the 47 percent of the crush that mills have applied to sugar production so far this season and at near maximum industry capacity to process sugar.

New York ICE sugar futures prices have surged nearly 23 percent since the start of June, when the market started keying in on the rain delays to crushing in May and June in Brazil, supplier of half the world's sugar exports. (Reporting by Reese Ewing; Editing by Gerald E. McCormick and M.D. Golan)

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