News Capsule: Rising energy prices may reduce Brazil’s sugar production
11-Mar-2026 11:02 AM
News Capsule: Rising energy prices may reduce Brazil’s sugar production
★ The surge in global energy prices due to the ongoing Middle East conflict could prompt Brazilian sugar mills to divert more sugarcane toward ethanol production and reduce sugar output in the upcoming season. Analysts say higher oil prices improve ethanol margins, encouraging mills to allocate a larger share of cane to biofuel.
★ Concerns over lower sugar availability from Brazil’s Centre-South region, the world’s largest sugar-producing area, have already pushed raw sugar futures up by more than 3 percent.
★ According to consultancy Datagro, Brazilian mills are expected to allocate around 48.5% of sugarcane to sugar production in the upcoming season, compared with 50.7% in the previous season. However, domestic fuel price decisions and government policy will remain key factors in determining the final production mix.