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23/11/2011 - REUTERS
ICE sugar has floor around 17 cents-JOB Economia

By Inae Riveras and David Brough; Editing by Dale Hudson

SAO PAULO, Nov 23 (Reuters) - ICE front-month raw sugar futures prices would have a floor of around 17 cents a lb, as Brazilian mills would find ethanol biofuel more remunerative than sugar around this level, an analyst said on Wednesday.

    ICE front-month, March raw sugar futures <SBc1> closed down

1.5 percent at 23.09 cents a lb on Wednesday, the lowest level

in 5-1/2 months.

    "It is unlikely that prices will stay under 17 cents

because we´ll stop producing sugar and will maximize ethanol

output. Prices can fall under 17 (cents) but they won´t stay

there for long," Julio Maria Borges, head of the JOB Economia

consultancy, told a seminar.

    JOB Economia estimates the next cane crop in Brazil´s 

center-south in a range between 540 million and 584 million

tonnes in 2012/13, depending on weather, up from 520 million

tonnes in 2011/12. The forecast is the highest among the

analysts attending Brazil Sugar Week. [ID:nN1E7AM12T]

    Analysts see bearish pressure on sugar futures prices into

2012 as the world absorbs a big trade flow surplus.

    In 2011/12, mills in the center-south produced 31.1 million

tonnes, posting the first drop in more than a decade due to a

decline in cane yields. They allocated about 47 percent of the

cane crop to sugar production in the current season.

    The center-south accounts for 90 percent of Brazil´s  cane

output. Brazil is the world´s largest sugar producer and



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