Porto Alegre, May 6th 2026 – SAFRAS & Mercado highlights that the month of May will be marked by updates from three highly important fundamental reference points for the sugar market, especially regarding price formation for raw sugar in New York. These three institutions released their respective supply projection reports during the second half of April. However, SAFRAS & Mercado warns that the impact on raw sugar prices in New York, and consequently on prices in the physical market in Brazil’s Center-South region, should continue to be observed and felt not only throughout May, but also during the remainder of the second and third quarters of 2026.
Basically, all relevant non-private entities that effectively influence raw sugar price formation in New York are projecting lower sugar production estimates. However, SAFRAS & Mercado had already anticipated this scenario in its first estimate for the new 2026/27 crop in Brazil and the Center-South region, published in December 2025 and later reinforced in early March 2026 in its second estimate for the new crop. The central analytical vector for the 2026/27 Center-South crop points to higher sugarcane crushing volumes, but lower sugar production, which will be offset by higher ethanol production, both anhydrous and hydrous.
As a benchmark for analysis, the latest SAFRAS & Mercado figures indicate sugarcane production of 620 million metric tons in the Center-South region for the 2026/27 crop, which would be 2.99% above the 2025/26 crushing volume of 602 million metric tons, representing an absolute increase of 18 million metric tons. Meanwhile, Conab’s first estimate for the new 2026/27 crop in the Center-South points to a 5.44% increase versus the previous crop, totaling 616 million metric tons, with an absolute increase of 33 million metric tons. USDA, in its preliminary April estimate released by the local attaché office, projects Center-South sugarcane crushing at 620 million metric tons for the 2026/27 crop. This represents a 4.80% increase compared to USDA’s estimate for the previous 2025/26 crop of 605 million metric tons, with an absolute increase of 29 million metric tons.
In turn, Unica updated at the end of April the first sugarcane crushing data related to the first half of April, without providing estimates for total crushing in the new 2026/27 crop. Even so, the figures were important to monitor the evolution of the 2026/27 crop, which, according to SAFRAS & Mercado, had already begun early in March, although those volumes were still accounted for within the previous 2025/26 crop. SAFRAS & Mercado notes that the previous 2025/26 crop was effectively completed in the second half of February, when only 361 thousand metric tons of sugarcane were processed, a typical end-of-season movement. However, sugarcane crushing volumes rose sharply again in March, reaching 1.24 million metric tons in the first half of the month and 7.55 million metric tons in the second half of March.
While total sugarcane crushing in February amounted to 713 thousand metric tons, March posted a sharp increase to 8.79 million metric tons, reflecting the early start of the new 2026/27 crop by dozens of mills in the Center-South region. Based on this movement, SAFRAS & Mercado considers the final Center-South figure for the 2025/26 crop at 602 million metric tons. In theory, the 8.74 million metric tons processed in March should be accounted for within the new 2026/27 crop. Therefore, there is a difference between the final accounting figure for the 2025/26 crop of 611 million metric tons and the final operational figure of 602 million metric tons. We therefore reinforce that we consider 602 million metric tons as the final figure for the 2025/26 crop. However, during May, the market will observe how the first half of April compares with the same period last year and with the immediately preceding fortnight in the Center-South region in order to establish pricing direction for raw sugar prices in New York during the first half of May.
In this sense, Unica data show that 19.95 million metric tons of sugarcane were processed in the region during the first half of April, up 20% from the same period last year. Compared to the immediately preceding fortnight, the second half of March, growth reached 164% compared to the 7.55 million metric tons processed in that period, considering the crushing activity of mills that started the new 2026/27 crop early, which was still accounted for within the previous 2025/26 crop. The same applies to sugar production, which totaled 647 thousand metric tons in the first half of April, showing a 12% decline year-over-year compared to the 735 thousand metric tons recorded in the same period last year, but a 263% increase on a fortnight-over-fortnight basis.
At this point, there are two distinct ways of interpreting the short-term sugar production data from the Center-South region. On one hand, there is the “glass half full” perspective, with a short-term increase of 263% in sugar production, comparing the first half of April with the second half of March on a sequential basis. On the other hand, there is the “glass half empty” perspective, with a 12% year-over-year decline comparing the first half of April 2026 with the first half of April 2025. In this context, SAFRAS & Mercado warns that the annual comparison highlights the outlook for lower sugar production despite higher sugarcane output.
This fundamental vector had already been anticipated by SAFRAS & Mercado in its first crop estimate published in December 2025 and reinforced in the second estimate from March 2026. This year-over-year decline reflects the projected decrease in sugar production for the full year, as a consequence of lower prices in New York. Meanwhile, the 263% sequential increase in sugar supply essentially reflects a statistical carryover effect from the low figures recorded in the second half of March amid the already consolidated early crop start observed in the first half of April. Therefore, the 263% sequential increase seen in the first half of April merely reflects a short-term statistical carryover and in no way signals any upward reversal in sugar production throughout the year.
Regarding sugar production, SAFRAS & Mercado estimates in its second crop projection for the new 2026/27 season a total output of 37 million metric tons in the Center-South region, representing a 7.50% decline compared to the previous crop’s 40 million metric tons, with an absolute reduction of 3.0 million metric tons. Conab’s first estimate for the new 2026/27 crop points to sugar production of 40.22 million metric tons, down 1.38% from the previous season’s 40.78 million metric tons, representing an absolute cut of only 563 thousand metric tons. USDA, meanwhile, projects sugar production in the Center-South at 39 million metric tons in the new 2026/27 crop, versus 40.6 million metric tons in the previous 2025/26 crop, representing a 3% annual decline.
Overall, SAFRAS & Mercado warns that July/26 sugar prices should continue to find support from nine simultaneous market vectors, which can be listed as follows: 1. higher oil prices due to the UAE’s exit from OPEC+; 2. higher gasoline prices, currently at their highest levels in 3.75 years; 3. a 1.4% decline in sugar production, falling from 40.78 to 40.22 million metric tons, a reduction of 563 thousand metric tons, according to Conab’s first estimate for the 2026/27 Center-South crop; 4. a 2.97% decline in Brazil’s sugar production estimated by USDA, with a cut of 1.30 million metric tons, from 43.80 to 42.50 million metric tons; 5. a 1.47% decline in Brazil’s sugar exports according to USDA, decreasing from 34.10 to 33.60 million metric tons, a reduction of 501 thousand metric tons; 6. a 9.53% decline in Brazil’s domestic demand, from 9.94 to 9.00 million metric tons, a reduction of 948 thousand metric tons; 7. a 15.62% decline in Thailand’s sugar production, falling from 11.25 to 9.50 million metric tons, a reduction of 1.75 million metric tons; 8. a 14.29% decline in Thailand’s sugar exports, decreasing by 1.00 million metric tons from 7.0 to 6.0 million metric tons; 9. the prospect of increasing the ethanol blend from E-30 to E-32, which should further shift the production mix toward ethanol and away from sugar.
Meanwhile, the bearish vectors for sugar prices in New York expected during May are basically four: 1. a 69.39% increase in beginning stocks for the new crop, with an increase of 1.14 million metric tons, from 1.63 to 2.78 million metric tons; 2. a 0.79% increase in China’s sugar production, rising from 12.60 to 12.70 million metric tons; 3. stable domestic demand at 15.80 million metric tons; 4. a 44.56% increase in ending stocks for the new crop, with an increase of 1.24 million metric tons, from 2.78 to 4.02 million metric tons, while China’s imports remain stable at 4.50 million metric tons.
Safras News – Copyright 2026
