(Adds comments from local executive of COFCO)
By Marcelo Teixeira
SAO PAULO, Nov 7 (Reuters) - Chinese food processor and commodities trader COFCO Agri is looking at opportunities to expand in the Brazilian cane milling industry, Marcelo de Andrade, the company's global head for sugar, told reporters on Monday.
COFCO is not the only Chinese company investing heavily in Brazil. State Grid and Three Gorges have been extremely active in recent years, buying local assets in the electricity sector. Chinese companies have also snapped up Brazilian miners and grain processors.
"COFCO is a company that wants to expand," Andrade said on the sidelines of the LMC sugar seminar in Sao Paulo. "We are talking to mills, looking at opportunities, but we are not going to do anything crazy."
He said that due to high sugar prices, companies interested in selling their assets were asking "absurd" prices for them - $80 to $100 per tonne of installed crushing capacity.
In comparison, when Cargill's Black River fund bought the Ruette mill late last year, the price was around $40 per tonne.
"We believe a fair price today would be from $50 to $75 per tonne of installed capacity," Andrade said.
COFCO, which is controlled by the Chinese government, has four mills in Brazil, all in the main Sao Paulo cane belt.
It will crush 14.5 million tonnes of cane in the current season, up from 11 million tonnes last year. The larger volume came after heavy investments in the agricultural area, according to Andrade.
COFCO expects to crush 18 million tonnes by 2019 through small investments in the mills it already owns.
The company increased its sugar production out of Brazil this year to 1.15 million tonnes from 900,000 tonnes in the previous season.
Allocation of cane for sugar production rose to 65 percent from 55 percent, and Andrade expects that to reach 67 percent next year. The rest of the cane goes to ethanol production.
For Brazil's main center-south region, he said sugar production was likely to stay the same next season as this year at around 35 million tonnes.
But he expects a smaller cane crop there next season, below the 600 million tonnes that the region will probably crush this season.
"We had drought, frosts, hail, a bit of everything," he said. "And cane fields, in general, are old." (Editing by Reese Ewing and Lisa Von Ahn)