Apr 01, 2026
Brazil to Produce More Ethanol, Less Sugar due to High Oil Prices
Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.
As the sugarcane harvest begins in Brazil (it generally starts in late March or early April), mills are expected to divert more sugarcane to ethanol production due to high oil prices according to the consulting firm Safras & Mercado. Brazilian mills are expected to utilize 47% of their sugarcane to produce sugar compared to 49% in the previous crop. The rest will be destined for ethanol production.
Total ethanol production, including the fuel made with corn, would increase 10.7% in 2026/27 to 42.58 billion liters. Safras & Mercado's ethanol and sugar analyst Mauricio Muruci expects the Brazilian government to increase the ethanol blend in gasoline from the current 30% to 35% by the second half of 2026. He estimates that each percentage point added to the mixing rate is equivalent to an additional volume of 920 million liters of ethanol.
As a result, sugar production is expected to fall to 40.3 million tons in 2026/27 compared to 43.5 million in the previous crop. Sugar exports in the new season are estimated at 29 million tons compared to 33.8 million in 2025/26.
More corn is also expected to be used for ethanol production. Corn ethanol could represent as much as 25-30% of Brazil's total ethanol production in 2026/27 with more than 20 million tons of corn used to produce ethanol. Almost all the corn used for ethanol production would come from the second corn crop produced in central and south-central Brazil.