Brazil's Center-South Mills Prioritize Ethanol Amid High Global Oil Prices

São Paulo, Brazil – Sugar mills in Brazil's dominant Center-South region are expected to maintain a strong focus on ethanol production during the upcoming 2026/27 harvest. This prioritization is driven by persistently high global crude oil prices and favorable domestic ethanol pricing. With Brent crude trading above $85 per barrel, the economic incentive to divert sugarcane crushing towards ethanol rather than sugar remains compelling for many producers. This strategic shift has been a recurring theme in recent years, significantly impacting the global sugar supply balance. According to analysts at DATAGRO, the cane allocation for ethanol could reach as high as 55% to 57% of the total crush. This substantial proportion would limit the amount of sugar available for export. "The current economic landscape strongly favors ethanol," commented a senior analyst. "Mills are optimizing their profit margins, and with robust demand for biofuels, this trend is likely to continue unless there's a dramatic shift in energy markets or a substantial rally in sugar prices that outweighs ethanol's profitability." This prioritization of ethanol by Brazilian mills underscores the intricate link between global energy markets and sugar supply. While Brazil is projected to have a robust overall cane harvest, the higher ethanol allocation means that the volume of sugar entering the international market from the world's largest exporter might not increase proportionally, thereby providing underlying support to global sugar prices.