Brazil’s sugar mills are considering running the crush past Christmas to reduce the amount of cane left in the fields after weeks of excessively wet weather. Crushing that late could make it harder to start up again in March, and could slow the supply ramp-up at the start of the 2027/28 season in the second quarter.
The rain has already cost output. Centre-South sugar production fell 27.1% year on year in the first half of October as the cane crush dropped 21.3%, with up to six days of crushing lost. Season-to-date sugar output is now 14.6% behind last year, and October exports were 22% lower, the seventh month in a row below the prior year. Mills have reportedly shifted their mix back toward sugar, while ethanol production is running higher than last season because corn ethanol filled the gap when the cane crush lagged.
Raw sugar futures have still been weaker since Vesper’s last update. A weak real after Brazil’s elections and the absence of fresh bullish fundamentals have helped keep prices lower, and mills have stepped up their hedging. Funds sold 16,173 lots in the week to 3 November but still hold a sizable net long.
Where prices go next depends largely on India, where mills started a month early on government orders, and on how Brazil’s new season gets going. Neither will be clear until the first quarter.
Read the full sugar market analysis here.
