We flagged sugar last issue as a commodity worth watching. The newest numbers make the case for us: Brazilian mills are pulling cane away from sugar and pouring it into ethanol instead, and the shift is bigger than most expected.
More Cane, Less Sugar
Sugarcane crushing in Brazil's South-Central region hit 144.7 million tons through June 1, up 15.8% from a year ago. Normally that would mean more sugar too. Instead, sugar output actually slipped 1.97%, while ethanol production jumped 31.55%. More cane went in. Less sugar came out.
The Mix Is Moving Fast
Sugar's share of the cane mix fell from 50.1% to 41.4% year-on-year. Ethanol's share climbed to 58.6%. Per ton of cane crushed, mills are extracting 15% less sugar and pumping out 20% more ethanol than they were a year ago.
- Sugar's mix share: 50.1% → 41.4%
- Ethanol's mix share: 49.9% → 58.6%
- Sugar yield per ton of cane: down 15.4%, to 47.3kg
- Ethanol yield per ton of cane: up 20.3%, to 41.3L
The most recent two-week window shows this accelerating, not leveling off. Sugar's share of the mix dropped to 44.2%, and output fell 25.6% year-on-year in that period alone.
Sao Paulo Isn't Alone
The shift shows up across every South-Central state, but it's sharpest outside Sao Paulo, where ethanol's mix share jumped to nearly 69%, up from 57.8% last year.
Why Ethanol Is Winning
Mills chase whichever product pays better, and right now that's ethanol. Domestic fuel-blending demand, gasoline pricing at the pump, and softer international sugar prices are all pulling cane in the same direction.
What Comes Next
If this pace holds, full-season sugar output could land below last year's despite a bigger harvest, tightening supply just as forecasts for Brazil's 2026/27 crop already range from 39.5 to nearly 44 million tonnes. This season isn't just about more cane. It's about where that cane goes.