Brazil sugar production forecast to rise 14% in 2027/28 – Rabobank
Rabobank projects tighter global sugar supplies and New York raw sugar futures of 17–19 cents per pound, while expanding Brazilian ethanol production could pressure domestic prices and mill margins.
BRAZIL – Sugar production in Brazil’s Center-South region is forecast to increase by 14% to 42.6 million tonnes in the 2027/28 marketing year (MY), up from 37.4 million tonnes in the current season, according to Rabobank.
The expected increase is attributed to favorable weather conditions and sufficient rainfall, which are projected to improve sugarcane yields. The recovery is anticipated despite the current slowdown in sugar mill operations across Brazil.
However, higher Brazilian output may not be enough to compensate for production constraints in other major sugar-producing countries. Rabobank projects the global sugar deficit will widen to 2 million tonnes in 2027/28, compared with 400,000 tonnes in the current season, keeping the global supply-demand balance tight.
Against this backdrop, raw sugar futures on the New York exchange are expected to trade between 17 and 19 cents per pound in 2027. Limited global supplies and uncertainty surrounding production in major exporting countries are expected to support prices.
Rabobank also forecasts a marginal increase in sugarcane-based ethanol production in Brazil’s Center-South region, from 26.6 billion litres to 26.8 billion litres.
Meanwhile, corn-based ethanol production is expected to expand more rapidly as new processing facilities become operational, strengthening corn’s contribution to Brazil’s biofuel industry.
India’s water availability and declining sugarcane acreage in Thailand remain among the major risks to global production. Thai farmers are shifting partly to alternative crops because of high fertilizer costs, potentially limiting the country’s future sugar output.
Separately, market intelligence firm Veeries projects Brazilian ethanol production will reach approximately 46.3 billion litres in MY 2027/28, supported by a record sugarcane harvest in the Center-South region and additional corn-ethanol plants.
However, domestic ethanol demand is expected to grow more slowly, creating an oversupply that could keep prices depressed, potentially below production costs for periods of the year, and put pressure on sugar mill margins.
Brazilian mills are expected to prioritize sugar production to benefit from higher international prices, supporting record output and exports. Nevertheless, the ethanol surplus from both sugarcane and corn is projected to remain substantial.
Corn-ethanol producers could experience shorter periods of financial pressure because of their lower production costs. However, a weaker second corn crop could affect this outlook.
The competing production trends highlight the challenges facing Brazil’s sugar and ethanol industries as mills balance international sugar prices against domestic biofuel market conditions in the 2027/28 season.
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