São Paulo – Brazil’s sugar and ethanol producers are expected to prioritize ethanol production in the 2026–2027 harvest, as biofuel prices reach multi-year highs while sugar futures hover near five-year lows, according to analysts and industry data reported by Reuters.
Data from the Ministry of Agriculture showed that 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, down 20.7 percent from 7.33 billion liters a year earlier. The supply shortfall has pushed average prices for hydrous and anhydrous ethanol in São Paulo state to their highest levels in nearly three years.
Meanwhile, international sugar prices touched a five-year low on Wednesday amid a global surplus, making ethanol an increasingly attractive option for producers.
Mauricio Muruci, an analyst at Safras & Mercado, said ethanol prices are currently 30 to 40 percent higher than sugar, creating strong incentives for mills to divert more sugarcane toward biofuel production in the next season. He added that inventories are expected to rebuild gradually 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—a reversal from the previous 2025–2026 crop year.
Julio Maria Borges, a partner at JOB Economia, explained that stock levels fell after limited ethanol production in 2025–2026. He noted that pump prices remained competitive with gasoline amid tight supply and steady demand. While inventories are currently very low, Borges said the upcoming harvest should improve availability and put downward pressure on prices.
At the same time, corn-based ethanol, which is produced year-round and is not dependent on the sugarcane harvest, continues to gain market share and is projected to reach another record in 2026–2027.Guilherme Nolasco, CEO of the National Corn Ethanol Union (Unem), said demand for corn ethanol has increased as producers seek to maintain supply in a tight market. Production from corn and other grains is expected to reach 12 billion liters in the new season.
