Consultancy: Low sugar stocks in Brazil encourage mills to increase early production

Sugar stocks in Brazil’s center-south were 70% lower than the average historical level in the first quarter. This led mills to allocate more cane early in the season, resulting in a higher sugar production.

Stocks dropped after a record 2024 export and a lower 2024/25 crop (April/March), said Mauricio Muuci, a consultant at Safras & Mercado.

He was commenting about data from the industry group Unica which had reported the previous day that 43% cane was being used to produce sugar in the second half March, the period before the official start of 2025/26 on April 1. This compares with 33.5% the year prior.

Muruci stated that due to the low stock, many mills decided to produce extra sugar at the start of the harvest in order to meet export contracts already signed.

According to historical standards, the majority of sugarcane produced at the start of harvest is used to produce ethanol. The remaining sugarcane is consumed due to concerns about the quality of raw materials early in the crop, as well as operational issues in the mills.

Unica reported in the second half March that 57% sugarcane would be used for ethanol production. (Reporting and writing by Roberto Samora in New York, Editing by Margueritachoy)

(source: Reuters)