UPDATE 1-Brazilian mills' sugar, ethanol output up in late August

Tue Sep 10, 2013 2:43pm EDT

(Adds quote, details from report)

SAO PAULO, Sept 10 (Reuters) - Cane mills in center-south Brazil increased their output of sugar and ethanol in the last two weeks of August from the first half of the month, as they operated near full capacity despite some wet weather.

Mills favored ethanol, allocating 51.37 percent of cane processed to the biofuel. Sugar output rose 2.91 percent from the first half of August to 3.2 million tonnes and ethanol surged nearly 10 percent in the period because of high domestic demand, local industry association Unica said on Tuesday.

Sugar output was down 3.74 percent from the same two weeks a year earlier, however, when mills were favoring sugar. Production of ethanol increased by 8.3 percent from a year ago.

Sales of ethanol in Brazil's center-south in August were up 21.4 percent from the same month in 2012 as prices for the biofuel remained well below normal gasoline prices in most states.

Brazilian mills crushed 48.54 million tonnes of cane in the second half of August. Unica said they were operating at almost full capacity even though the normally dry season has been wetter than usual.

"Very few days were lost by center-south producers in August," Unica's technical director Antonio de Padua Rodrigues wrote in the emailed report.

Though the cane crush is progressing well, wetter-than-average weather in recent months, late July frosts and a weakening local currency have prompted local forecasters to revise expectations for this season's cane crush which is expected total a record 580 million to 585 million tonnes. (Reporting by Caroline Stauffer; editing by Jim Marshall)

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