Brazilian sugar and ethanol producers should not get carried away by firm prices and expected increased demand, especially for fuel ethanol, a leading industry official said on Thursday. "The sector is riding a wave of euphoria. But this could be dangerous," Roberto Rezende Barbosa, president of Grupo Nova America, told reporters at a Feicana sugar industry seminar in Aracatuba, Sao Paulo state. Last week Nova America bought Uniao, Brazil's best known sugar brand, from the Copersucar co-operative. Nova America now has a 28 percent share of the Brazilian retail sugar market.
"The market could change. People could plant too much cane and create a surplus," Barbosa said.
He said that mills were being built too close together, which meant they could not operate at full capacity because of insufficient land to grow sugar cane.
"I've heard of people building mills 15 kilometres (9 miles) apart. In the past we had too many mills in Piracicaba and Ribeirao Preto ... we could see the same thing in Aracatuba," Barbosa said, referring to a district in the western part of Sao Paulo state where many new mills are being built.
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