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SAO PAULO, May 7 (Reuters) - Brazilian conglomerate Cosan SA expects cane crushing in its sugar and ethanol division in the 2015/16 crop to be closer to the top of a guidance of between 57 and 60 million tonnes that it gave investors.
Cosan's CEO Nelson Gomes said on Thursday that better weather since the end of the last crop in December is likely to increase cane yields compared to the 2014/15 season.
"At this moment, we are indicating a crushing volume closer to the guidance's top rather than the middle of it," said Gomes in an earnings call with analysts.
Raizen, the sugar and ethanol joint venture between Cosan and Royal Dutch Shell, processed 57 million tonnes of cane in the 2014/15 crop.
Cosan expects Raizen to produce more sugar in the new crop, between 4.2 million and 4.4 million tonnes, compared to 4.08 million tonnes produced last season, which was hurt by drought.
Ethanol production is forecast between 1.9 and 2.1 billion liters, against 2.06 billion liters in 2014/15.
Gomes said higher volumes of ethanol sales seen in Brazil this year will lead to a reduction of stocks to normal levels towards the end of the new crop.
Cosan and other large groups in the sector carried a larger than normal volume of ethanol stocks between the old and the new crop, waiting for better prices.
Better yields at the beginning of the new crop and a greater allocation of cane to ethanol production is pressuring prices of the biofuel lower in Brazil.
Brazilian fuels regulator ANP said on Monday hydrous ethanol prices in southeast Brazil averaged 64.4 percent those of gasoline, the lowest price ratio to gasoline in four years.
Cosan, which include natural gas and fuels distribution, port, railway and land management assets, posted a net loss of 43.7 million reais ($13 million) in the first quarter of 2015, compared to a 256.1 million real gain a year ago.
The results were hurt by costs involved in takeover of Brazil's largest railway operator America Latina Logistica, also known as ALL.
Raizen operates 24 sugar and ethanol mills, making it the world's largest sugar and ethanol producer.
Brazil's cane belt began crushing the new crop in April and is expected to recover slightly from last year's drought after rains started to normalize in recent months. (Reporting by Reese Ewing and Marcelo Teixeira; Additional reporting by Roberto Samora)