Brazil’s sugar production to rise 14% in 2027/28 — Rabobank

Sugar production in Brazil’s Center-South region could increase by 14% in the MY 2027/28, reaching 42.6 mln tons compared with 37.4 mln tons in the current season. According to Rabobank, the main drivers of higher production will be favorable weather conditions and sufficient rainfall, improving sugarcane yield prospects. The expected production recovery will come despite the current slowdown in sugar mill operations across the country.

Meanwhile, higher sugar production in Brazil will not be sufficient to fully offset supply constraints in other countries. According to Rabobank, the global sugar deficit could widen to 2 mln tons in 2027/28, compared with 400 thsd tons in the current season. Thus, despite the expected expansion of Brazilian production, the global sugar supply-demand balance is likely to remain tight.

Against the backdrop of the projected deficit, global sugar prices could remain relatively high. Rabobank expects raw sugar futures on the New York exchange to trade within a range of 17–19 cents per pound in 2027. Prices are expected to be supported by limited global supplies and uncertainty over production prospects in major exporting countries.

According to the bank’s forecast, sugarcane-based ethanol production in Brazil’s Center-South region will increase only marginally, from 26.6 bln to 26.8 bln liters. Meanwhile, corn ethanol output is expected to grow much more rapidly as new processing facilities come online. The expansion of this segment is strengthening corn’s role in Brazil’s biofuel industry and helping diversify the feedstock base for ethanol production.

Among the main risks to the global sugar market, Rabobank highlights uncertainty over water availability in India and declining sugarcane acreage in Thailand. Thai farmers are partly shifting to alternative crops due to high fertilizer costs, potentially limiting future sugar production. Under these conditions, even a substantial increase in Brazil’s sugar output may not be enough to restore the balance between global production and consumption.

Tags: Brazil, sugar