Brazil Likely to Prioritize Ethanol Production Over Sugar

03-Feb-2026 09:02 PM

Sao Paulo. In Brazil, located in Latin America, plants are likely to use a larger quantity of sugarcane for ethanol production rather than sugar during the 2026-27 season. The new sugarcane crushing season is set to begin in April. Brazil is the world's leading producer and exporter of sugar.

It is understood that in the central-southern region of Brazil, which accounts for approximately 90 percent of the country's sugar production, sugar prices remain below production costs. This is weakening the financial position of millers.

According to a report by a leading international trading company, Brazilian millers had hedged only 20 percent of their total estimated sugar sales on the ICE exchange in New York, compared to nearly 70 percent two years ago.

According to the company, the cost of sugar production in Brazil's central-southern region is currently around 16.3 cents per pound, while the futures price of raw sugar on the New York exchange is only 14.30 cents per pound. In Brazil, sugar prices are assessed in the local currency, the real.

The price of sugar has fallen to around 1700 reais per metric ton, the lowest in five years. As a result, the estimated share of sugarcane used for sugar production has been reduced from 50.50 percent in the 2025-26 season to 48.3 percent. This is likely to lead to a decrease in sugar production and a significant increase in ethanol production.