Porto Alegre, May 5th, 2025 – The physical crystal sugar market had higher prices in April when compared to the previous month. In April, there was a 1.19% increase in its trading average when comparing the period’s prices of BRL 137.00/50 kg with the average of BRL 135.39/50 kg in March. Despite the increase in the margin, in the yearly comparison, to April 2023, sugar shows a strong decline of 9.86%, as well as a decline of 7.24% compared to the 5-year average for the same period, which fluctuates at BRL 147.70/50 kg.
It is interesting to remember that both the 5-year average and the annual comparison are with prices corrected by inflation, put in current values, and that the sugar in question is crystal with up to Icumsa 150 based on the Ribeirão Preto region. Another important point that SAFRAS & Mercado draws special attention to is the short-term upward movement, even with the start already brought forward in March, to the new 2025/26 crop in the region.
This has occurred due to the greater preference of mills for the production of VHP sugar, hydrated and anhydrous ethanol, and, only later, crystal sugar. This ends up leaving the supply of crystal sugar with Icumsa 150 reduced even after the official start to the cane crushing of the new 2025/26 crop, which had started already in March. In SAFRAS & Mercado’s view, the supply of crystal sugar will only be back to normal and put negative pressure on prices only from the end of May.
Also in the new 2025/26 crop, there is another unusual point, which is the reduction in the concentration of the ethanol production mix for sugar. In other words, we can say that, although ethanol continues to maintain its high concentration pattern in the production mix, it has been lower throughout this new 2025/26 crop, which is clearly atypical of the historical average of concentration levels in the production mix. However, there is a big detail at this point regarding crystal sugar.
Although the mix for sugar is higher than the historical average for the period, the extra cane that has been directed to sugar is being used for the production of VHP rather than crystal sugar. Looking at the crushing numbers for the Center-South provided by Unica, we can clearly see this movement. The most recent data still refer to the first and second halves of March and show that the crushing concentration levels for ethanol in this period were 69.88% and 56.99%, respectively.
One detail is that from the first to the second half of March, there was an even more atypical reduction in the concentration of the ethanol production mix, which, during the first four fortnights of cane crushing, usually fluctuate between 70% and 100% for ethanol.
However, as we have analyzed, this new 2025/26 crop has shown itself to be very atypical at the beginning in terms of mix concentration levels, a movement that is clearly related to the low VHP stocks in the Center-South, which confirms the analysis that although more sugar is being produced than the historical average over the period, it is VHP sugar that has been most demanded by mills.
Observing VHP stocks throughout the first quarter of 2025, we see that volumes show declines of -56%, -61% and -66% in the annual comparison and of -39%, -49% and -53% respectively in the months of January, February, and March, which demonstrates that sharply lower volumes of VHP stocks have led mills to allocate a larger volume of processed cane to replenish their supply. Crystal sugar stocks in the period throughout the Center-South were also lower but with a lower decline than those of sugar. In January, February and March, crystal stocks with Icumsa from 0 to 180 showed declines of -34%, -38% and -44% YoY and of -25%, -34% and -35% compared to the 5-year average for the same period.
