(New throughout, adds details on crop, comment from COOMizutani)
By Marcelo Teixeira
SAO PAULO, July 7 (Reuters) - Brazil's 2015-16 sugar caneharvest will be bigger than expected due to favorable weather,the chief operating officer of Raizen, the country's largestsugar and ethanol producer, said on Tuesday, and the company'sown production will be at the high end of its predicted range.
COO Pedro Mizutani said Brazil's center-south cane cropshould approach 600 million tonnes, but added that mills maystruggle to crush the entire crop if July turns out rainier thanexpected.
"We are sticking to (guidance of) 57 million to 60 million,but closer to 60 million than 57 million" for Raizen's expectedcane production, Mizutani said on the sidelines of the EthanolSummit in Sao Paulo, organized by the Unica cane millingindustry association.
"Really, agricultural yields have shown to be above expectations," Mizutani said, adding that good weather so farthis season has helped the cane crop recover from last year'sdrought.
Brazil's larger milling groups such as Raizen, which is ajoint venture between Brazilian conglomerate Cosan SA and Royal-Dutch Shell PLC, said in recent weeks thatthey would favor sugar production more than initially expected.
This comes despite the multi-year lows the sweetener's pricehas posted recently on the futures markets.
Mizutani said many cash-strapped mills in the center-southcane region are favoring ethanol production because of the easeof selling it on the local market compared with sugar exports,which require export financing and time to generate revenues.
"Everyone is favoring ethanol. It has greater liquidity. Wedon't have a liquidity problem," Mizutani said. "We need toassess what is best in terms of the market. At the moment, itcontinues to be sugar."
The executive did not rule out shifting Raizen's productionmix more toward ethanol later if demand for the biofuel provesrobust.
Crushing officially began in April, and shipments andloading of sugar at Brazil's ports have been normal so far thisseason.
Mizutani did express concern that too much rain in July,typically one of Brazil's dryest months, could keep mills fromharvesting all the mature cane available before they have toshut down in December due to the rainy season.
"If rains continue strong in July, it could mess things up,"Mizutani said.
Brazil's center-south cane belt has been wet in recent days,but Mizutani said, so far, weather has been normal and millshave only lost a few days to wet weather. Mills tend to suspendthe crushing of sugar cane during rain. (Reporting by Marcelo Teixeira; Writing by Reese Ewing; Editingby David Gregorio)
