Brazil Sugar Hedging Hits 55% as Mills Pivot to Ethanol

The latest data on Brazil sugar hedging for the 2026/27 season shows a steady but lagging pace, reaching 55% as of mid-April.

April 13, 2026 – Brazilian sugar mills are navigate a complex pricing environment as they enter the 2026/27 crushing season. According to the latest report from Archer Consulting, mills have hedged approximately 55% of their projected sugar exports. While this represents a steady climb from earlier months, it significantly trails the 72.5% pace recorded at the same time last year.

The “Cost vs. Price” Dilemma

The primary driver behind this 17.5 percentage-point lag is a tightening margin squeeze. International sugar prices (ICE NY No.11) have lingered between 14–15 cents per pound, failing to meet the estimated production cost of 16.3 cents/lb for mills in Brazil’s Centre-South.

“Producers are understandably reluctant to lock in prices that essentially guarantee a loss,” noted an industry analyst. This “wait-and-see” approach was momentarily interrupted in March when a brief geopolitical rally provided a selling window, allowing mills to accelerate fixations from the 38% seen in January.

Structural Shift: Sugar to Ethanol

The lack of attractive sugar pricing is forcing a recalibration of the production mix. Archer Consulting has revised its 2026/27 sugar mix forecast down from 50.5% to 48.3%.

Sugar Output: Now estimated at roughly 40 million tonnes.
Total Cane Crush: Projected at 620 million tonnes, supported by improved rainfall that may offset the lower sugar recovery.
The Pivot: Ethanol has become the “safety net.” By steering more cane toward ethanol, mills can manage cash flow without committing to the depressed international sugar market.

YnSugar Analysis: What This Means for Global Supply

The global market is currently staring at a potential surplus for the 2026/27 cycle. However, Brazil remains the “wild card.” If NY No.11 prices do not recover above the 16-cent mark soon, the continued shift toward ethanol will tighten the global sugar balance more than currently anticipated.

Bottom Line: For traders, the key metrics to watch over the next 30 days are the UNICA fortnightly crushing reports and the evolution of Brent crude prices, which could further bolster ethanol’s relative profitability.