Brazil mills to focus on ethanol in new season
Brazilian mills are set to shift toward ethanol in 2026–27 as biofuel prices hit multi-year highs and sugar futures hover near five-year lows. Center-south ethanol stocks are down 20.7%, tightening supply. About 53% of cane may go to ethanol, while corn-based output is projected at 12 billion liters.
Sao Paulo: Brazil’s sugar and ethanol producers are expected to focus more on ethanol production in the 2026–2027 harvest as biofuel prices climb to multi-year highs while sugar futures remain near five-year lows, analysts and industry data indicated, Reuters reported.
Figures from the agriculture ministry showed ethanol stocks in Brazil’s center-south region, the country’s main economic and production hub, totaled 5.81 billion liters as of January 15, marking a 20.7 percent drop from 7.33 billion liters a year earlier. The supply gap has driven average prices for hydrous and anhydrous ethanol in Sao Paulo state to their highest levels in nearly three years.
At the same time, international sugar prices touched a five-year low on Wednesday, weighed down by a global surplus, further strengthening the appeal of ethanol for producers.
Mauricio Muruci, an analyst at Safras & Mercado, said ethanol prices are currently 30 to 40 percent higher than sugar, creating a strong incentive for mills to channel more sugarcane toward biofuel production in the next season. He added that inventories are expected to be gradually rebuilt over the year.
The consultancy forecasts that about 53 percent of sugarcane will be allocated to ethanol in the 2026–2027 season, which begins in April, reversing the trend seen during the 2025–2026 crop year.
Julio Maria Borges, a partner at consultancy JOB Economia, said stock levels fell after ethanol production remained limited in 2025–2026. He noted that pump prices stayed competitive with gasoline amid restricted supply and steady demand. While describing current inventories as very low, Borges said the upcoming harvest should improve availability and place downward pressure on prices.
Meanwhile, corn-based ethanol — produced throughout the year and not dependent on the sugarcane harvest — continues to expand its market share and is projected to reach another record in 2026–2027.
Guilherme Nolasco, chief executive of the National Corn Ethanol Union (Unem), said demand for corn ethanol has risen as producers seek to maintain supply in a tight market with low inventories. Production from corn and other grains is expected to reach 12 billion liters in the new season, he added.
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Source : Chinimandi
