Datagro President Plinio Nastari attributed the growth to increased planted area to feed new sugar-ethanol mills, especially in north-west Sao Paulo state, and to good climatic conditions.
"Rainfall was over 50 percent above average in the main cane growing regions of Sao Paulo in January," Nastari told Reuters by phone. "It has been drying out in the center-south but it is very sunny, which the cane plant needs now."
Local forecasters have reported that Brazil's southern states have been drier than normal in February, including Parana - an important cane state after the leading producer Sao Paulo.
The center-south crop should produce 24.1 million tonnes of sugar, up 9.2 percent from the nearly 22.1 million tonnes produced from the previous crop.
With domestic consumption expected to remain around 9 million tonnes, exports of sugar are expected to grow to 16.2 million tonnes, up 15.3 percent from the previous season.
"Domestic consumption will grow modestly, about 2 percent, but exports should grow substantially, especially to India and China. Prices are attractive right now, which will help to offset the depreciation in the dollar," Nastari said.
Datagro forecast cane-based ethanol output from the center-south crop to grow 10.1 percent from 2004/05 to 14.93 billion liters in the coming year.
But Plinio said ethanol exports should remain at 1.7 billion liters, as growing domestic demand for the fuel by Brazil's auto fleet would absorb some of the expected increase in output. Ethanol stocks would also grow, he said.