Sugar prices: Global highs and the challenges of the Brazilian harvest

The sugar price scenario continues to be marked by volatility, reflecting the interaction between global factors and the dynamics of the Brazilian harvest. The recent rises on the international stock exchanges indicate a technical recovery driven by the covering of short positions after historic lows.  

However, the outlook for the 2025/26 cycle remains bearish, underpinned by the expectation of a global surplus, with the possibility of a good harvest next year.  

In this article, you'll find an analysis of: 

• What's driving the global sugar price recovery;
• The impact of the 2025/2026 Brazilian harvest and the quality of the raw material;
• The mills' strategic decisions between sugar and ethanol production;
• Implications and challenges for the sugar-energy sector.
  
  

Happy reading!

What explains the recent rise in global sugar prices? 

The recovery in sugar prices on the global market is a technical movement driven mainly by short covering, which occurs after contracts reach multi-year lows. This movement is a tactical response by traders in the face of prices reaching a five-year low for raw sugar (14.04 c/lb) and an almost five-year low for white sugar (US$ 406/t). 

In the March/26 contracts, this dynamic resulted in a 0.8% advance for raw sugar (14.78 c/lb) and a 1% advance for white sugar (US$ 424.10/t). The Indian government's signals about raising the price of ethanol mixed with gasoline also contributed, as it could encourage mills to use more cane for biofuels, reducing the availability of sugar. 

On the other hand, there are factors limiting this rise. The devaluation of the Brazilian real, which reached its lowest level in five weeks, makes Brazilian exports more attractive and puts pressure on global prices. In addition, India authorized the export of 1.5 million tons, down from estimates of 2 million, but without altering the fundamental trend. 

Even with this technical recovery, Hedgepoint points out that the scenario remains bearish, since institutions such as the ISO (International Sugar Organization) project a global surplus of 1.625 million tons for the 2025/26 cycle. 

How will the 2025/2026 Brazilian harvest influence the global sugar supply? 

Despite the lower ATR (Total Recovered Sugar) this harvest, the advance in crushing in the second half of the cycle and the more sugar-oriented mix have sustained high production, limiting the downward potential of prices even in the face of the global surplus scenario. 

Accumulated sugar production in the Center-South for the 2025/2026 harvest up to October has already reached 38.085 million tons, which represents an increase of 1.6% compared to the previous cycle. 
Higher than expected production in the Center-South region of Brazil, especially in the second half of the harvest, is one of the main factors reinforcing the prospect of robust supply. Sugarcane crushing recovered after July, and accumulated sugar production had already surpassed the levels of the 2024/2025 cycle by the end of September, with the harvest projected to end on a high note. Conab raised its sugar production projection for Brazil in 25/26 from 44.5 to 45 million tons in November, maintaining the prospect of a record harvest and, consequently, putting pressure on prices. 

Raw material quality 

• India is expected to produce 30.95 Mt of sugar; 
• Thailand should exceed 10 Mt, with favorable weather conditions. 

Sugar and ethanol production: mills' strategic choices 

The lower quality of sugarcane is a factor that, along with comparative profitability and energy prices, influences mills' decisions about whether to use sugarcane for sugar or ethanol production. Although ethanol has been more profitable than sugar in some regions, which could lead mills to allocate more cane to biofuel, the trend is for little change in the mix this cycle.  

The drop in oil prices and the high levels of sugar mix in previous months, which reached 55% in August before falling to 48.24% in the first half of October, guarantee robust sugar production. The drop in the sugar mix is also a move to avoid additional pressure on the sweetener's international prices.  

Current projections indicate that Brazilian ethanol production will fall to 32.7 billion liters in 2025, due to the prioritization of sugar. 

What are the main challenges and implications for the sugar-energy sector? 

The combination of the drop in sugarcane quality and the significant increase in production, driven by favorable weather conditions and expansion of the planted area, creates a scenario of challenges and opportunities for the sugar-energy sector. Although higher international prices, driven by the technical movement of short covering, benefit mills that have sugar available to export, the expectation of a global surplus limits the potential for more significant increases. 

In this context, production efficiency and cost management will become decisive factors for the next cycle, with agricultural productivity playing a central role in reducing the cost per ton.  

How to navigate the sugar price scenario? 

The market remains divided between short-term technical support and projections of a global surplus in 2025/26. Brazilian production remains strong, even with below-average ATR, and the performance of mills between sugar and ethanol will continue to be a key factor in balancing supply. 

In an environment of volatility and a bearish outlook, monitoring sugar harvest indicators, raw material quality and global market movements is essential for all players in the sector.  

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