UPDATE 1-Brazil's Cosan expects to crush 10 pct more cane this season
* 62 mln T crush would still be below 65 mln T capacity
* Brazilian mills seen favoring ethanol over sugar (Adds year-ago crush, details)
SAO PAULO, April 16 (Reuters) - Sugar and ethanol producer Cosan expects to crush 10.3 percent more sugarcane this season than a year earlier as Brazil produces a record cane crop, President Marcos Lutz said on Tuesday.
Cosan, which controls the world's biggest sugarcane processor, Raizen SA, jointly with Royal Dutch Shell, expects to crush 62 million tonnes of cane in the 2013/14 season, up from 56.2 million tonnes a year earlier. Still, that would be below the company's 65-million-tonne capacity, Lutz said.
The new season started April 1.
Speaking at a conference in Sao Paulo, Lutz said mills in the world's top cane grower were likely to favor ethanol over sugar production this season due to the low price of the sweetener, a view shared by many private sector analysts.
"The idea is to push a little more for ethanol this year," he said. Cosan devoted 56 percent of its cane to sugar production last season.
He said the blend of sugar and ethanol would ultimately depend on rains. Rains have delayed the early harvest in Brazil, pushing raw sugar futures upward on the ICE exchange.
Brazil's government has promised to cut taxes to make ethanol more competitive with gasoline, possibly providing a further incentive for mills to make the fuel.
Cane output in Brazil's main center-south producing area will likely rise to a record 594 million tonnes in the 2013/14 season, up from 533 million tonnes a year ago, the government's crop supply agency Conab said earlier this month. (Reporting by Gustavo Bonato; Writing by Caroline Stauffer; Editing by John Wallace)
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