Brazil's new sugarcane season ethanol production is expected to hit a record 41.4 billion liters, as Middle Eastern energy cost transfers boost the sugarcane-to-ethanol ratio.
- Datagro projected on Wednesday that Brazil's nationwide ethanol production for the 2026/27 crushing season will reach 41.4 billion liters, setting a new historical record. In the Central-South region, sugarcane crushing will total 642.2 million tons, sugar production will be 40.98 million tons, and ethanol production will reach 38.61 billion liters. Nationwide sugarcane crushing is expected to be 698 million tons, with sugar production of 44.2 million tons.
- The Middle East conflict has driven up energy prices, prompting sugar mills in Brazil's Central-South region to favor ethanol production over sugar during the initial months of this crushing season. The production mix is tilting towards ethanol. The global sugar market is expected to see a small surplus of 57,000 tons in the 2025/26 season, but a deficit of 3.17 million tons is anticipated in the 2026/27 season.
- The potential impact of El Niño on India and Indonesia, as well as reduced planted areas in Europe and Thailand, are listed as key supply-side variables. Against the backdrop of high crude oil prices, Brazil’s ethanol price advantage is increasingly evident, which will support sugar prices remaining at elevated levels.
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