Brazil is expected to enter the market with its fresh sugar production for the 2026-27 in April-May.
Speaking to ChiniMandi, Nick Kwolek, Managing Director of Kulea (African commodities experts), said that sugar production in Brazil is expected to be 40.5 million tons, with a bias towards increased sugar production.
How this higher sugar production will impact the overall global sugar supply and demand dynamics will be understood in the days to come.
Q. What is the forecast for the 2026-27 season?
A. Kulea is currently forecasting sugar production at 40.5 million tons based on sugarcane crushing of 622 million tons
Q. What is the ratio between sugar and ethanol?
A. We feel Brazil will prefer more sugar in 2026-27. The ratio would be 49% ethanol and 51% sugar.
Q. Given the geopolitical situation, should Brazil produce more sugar?
A. We feel that there could be disruptions to the global oil supply in 2026. This is a view shared by several large funds that are speculating on an oil price squeeze this year, based on a geopolitical bias.
Should oil get squeezed, then we could see a swing more towards Ethanol. If this doesnтАЩt happen, then sugar is likely a safer bet, as a smooth oil market with no supply shocks could see a price drift lower during the year, making sugar look more attractive than ethanol.
Q. If Brazil opts for more sugar, is it likely impact on global S&D and India?
A. Yes, as it will put more pressure on the balance sheet and most likely the flat price, which ultimately will affect India, as they will have to follow the market down, being fixed price sellers.
