Brazil Sugar - Weather Disruptions Slow Strong Start; Ethanol Caps Upside

研报英文原文证据摘录

Brazil Sugar - Weather Disruptions Slow Strong Start; Ethanol Caps Upside

Foundation

June 26, 2026 04:01 AM GMT

Morgan Stanley C.T.V.M. S.A.+MLatAm Agribusiness | Latin America Julia Rizzo

Equity Analyst and Commodities Strategist

Brazil Sugar - Weather Julia.Rizzo@morganstanley.comJulia Habermann +55 11 3048-6114

Research Associate

Julia.Habermann.Oliveira@morganstanley.com +55 11 3048-6096

Disruptions Slow Strong Start;

LatAm Agribusiness

Latin America

Industry View In-LineEthanol Caps Upside

2026/27 started strong but slowed on weather disruptions,

while prices remain under pressure amid abundant supply, softer

macro & lower oil. Persistent rains risk further delays, lower

TRS/yields and shift toward ethanol, although excess ethanol

supply is likely to cap any meaningful price recovery

Key Takeaways

Brazil sugar markets face weather-led swing risk as persistent rainfall and colder

temps slow harvest/crushing and could push mix toward ethanol.

Brazil ethanol inventories moved above historical avg as strong production

growth met muted demand response, even with ethanol’s attractive pricing vs

gasoline.

Weaker sugar output, accumulated 2026/27 sugar production fell -2.0% YoY to

6.84Mt as sugar mix dropped to 41.42% vs 50.09% last year.

Ethanol is trading at a premium to sugar, so producers should keep maximizing

ethanol production (+ Ethanol Supply) over Sugar.

Strong ethanol output is pressuring producer prices, improving pump‑level

competitiveness & supporting demand. The blend hike policy should help absorb

supply.

MS view: CS Brazil’s 2026/27 crop started strongly but is now losing momentum

due to weather disruptions, while sugar prices remain under pressure amid

ample global supply, a softer macro backdrop, and lower oil prices. Persistent