Porto Alegre, July 28th, 2025 – The end of July was an even more negative period for the physical crystal sugar market when analyzed from the perspective of price behavior. This is because price lows intensified in the short, medium, and long term. Between June and July, average prices fell 20.40%, from BRL 122.58 to 114.16/50 kg. In the annual comparison, the July 2025 decline from the same period in 2024 was 19.67%. Compared to the five-year average for the same period, current July prices were 6.95% lower than the typical price pattern observed at this time of year, at BRL 143.30/50 kg.
Both the YoY and the five-year average were inflation-adjusted and expressed in current prices. We also considered the price pattern for a 50-kg bag of crystal sugar, ranging from Icumsa 150 to 180, based on the Ribeirão Preto region. Since May this year, SAFRAS & Mercado has been warning of the expected downward pressure on sugar prices in 2025.
This was evidenced by data from the USDA’s most recent biannual report on sugar supply and demand in Brazil, specifically on domestic demand. According to the Department’s May report, domestic demand is expected to decline by 600,000 tons between the 2024/25 and 2025/26 seasons, down 6.32%.
Besides the decrease in absolute and comparative terms, there is also a third impact: the shift in domestic demand away from the important benchmark of the current 10 mln tons of domestic demand that has always guided the Brazilian market. Between the 2015/16 and 2021/22 crops, sugar consumption in Brazil fluctuated around this benchmark.
Before that, domestic demand was even higher, just above 11 mln tons, which made the situation even more comfortable for mills. However, between the 2022/23 and 2024/25 seasons, domestic sugar demand fell below 10 mln tons a year, but remained close to this long-term benchmark, hovering at 9.5 mln tons. During this period, mills were not concerned about this decline in demand.
However, data from the USDA’s most recent May 2025 report, covering the region’s current 2025/26 crop, showed a significant widening of the negative 10 mln ton target, with domestic demand for this crop expected at 8.9 mln tons. Essentially, the market observes that, in addition to moving further away from the 10-mln-ton target, it has also lost the 9.00-mln-ton base and is now hovering around 8 mln tons, which has had a strong negative impact on mills’ perception.
This has resulted in the lowest physical market prices for a 50-kg bag of crystal coffee seen since May this year. However, SAFRAS & Mercado warns that there are some medium-term counterweights, starting with the decline in the current crop from 614 to 595 mln tons (SAFRAS & Mercado’s most recent estimate, conducted in July 2025). Besides this ongoing decline (which was exacerbated by the frosts of the last week of July), mills are also experiencing a high level of VHP exports and anhydrous ethanol consumption (with the increase in the blend from 27% to 30%, which will increase domestic anhydrous ethanol consumption by 1.65 bln liters in 12 months).
Were it not for these two factors, the physical market for crystal sugar could clearly be fluctuating now below BRL 110/50 kg per bag, instead of remaining close to BRL 115. Last month, SAFRAS & Mercado expected average prices for crystal sugar in the physical market at BRL 116.00/50 kg, which was 1.70% above the effective average for the period, which was BRL 114.06. For August, SAFRAS & Mercado expects average prices to be around BRL 115, which, once confirmed, will represent an 0.8% increase in the margin, a 17% decrease YoY, and a 19% decline from the 5-year average for the same period.
