It is reported be Reuters.

Mills in the world's largest sugar-producing region crushed 38,91 mln t of cane late in August versus 45,28 mln t in the first half of the month, Unica said. Analysts were expecting almost 42 mln t.

Sugar production was 2,53 mln t in the second half of August, compared to 3,15 mln t in the previous two-week period and an average expectation for 2,82 mln t.

«The numbers indicate a reduction in the pace of cane crushing», — Unica said in the report, without providing a possible reason.

Ethanol production reached 1,77 bln l versus 1,94 bln l in the previous two-week period. Market consensus was for an output of 1,86 bln l.

Unica confirmed a recent trend by mills to increase ethanol production and reduce sugar output, since the biofuel is giving companies larger revenues currently.

«Ethanol has paid better than sugar for about a month and generally big mills only change their mix after a longer period of constant profitability of one commodity or the other», — Kingsman senior sugar analyst, Claudiu Covrig, said, expecting 48,9 percent of cane to be used for sugar output.

But the sugar mix was even lower at 46,9 percent, said Unica, adding that ethanol sales in August were 23 percent above July and the largest amount sold by mills in one fortnight in the last 12 months.

Unica said a smaller offer of imported ethanol in the market, recent increases on gasoline prices, and rising demand for fuels in Brazil as the economy recovers were behind improved sales of the biofuel in the month.