June was a period of sharp lows in the trading prices of crystal sugar on the physical market in the Center-South region of Brazil. The lows were not only sharp but also volatile, considering that June began with average negotiations at BRL 130 per 50 kilograms and ended with sales at BRL 114 per 50 kilograms.
SAFRAS & Mercado considers the 50-kg bag of crystal sugar with up to Icumsa 150 as the basis for analyzing sugar on the physical market, based on Ribeirão Preto. In this context, June had average sales at BRL 122.58/50 kg, down 15.58% from the average seen in the same month of the previous year and 9.76% lower than the five-year average for the same period, which currently hovers at BRL 147.47/50 kg.
Both the annual and the 5-year averages for the same period consider deflated prices, corrected by inflation and set at present values. Furthermore, in the margin, compared to the previous month, the average sales of crystal sugar showed the same scenario of intense losses, at 16.88%.
Therefore, SAFRAS & Mercado points out that the average prices of crystal sugar with Icumsa 150 in June were strongly negative from all perspectives of comparison (short, medium and long term). What is behind this scenario of weaker prices is not only the seasonality of the period, with the arrival of the new 2025/26 crop in the Center-South, but also the prospect of low demand for sugar in the domestic market expected for this current crop in the region.
In its most recent biannual report monitoring sugar supply and demand in Brazil, USDA indicated a domestic demand for the commodity of 8.90 mln tons. This is the lowest volume of domestic sugar demand in Brazil since the beginning of our historical monitoring series that dates back to the 2007/08 season. In addition, domestic demand between the current crop and the previous one showed a reduction of 600 thousand tons, or a decline of 6.32%, which helps to reaffirm the scenario of falling consumption.
This has impacted the market so much that not even the problems with the current 2025/26 cane crop in the Center-South have been able to sustain sugar prices on the physical market. SAFRAS & Mercado highlights that the current 2025/26 season has been marked by a 9% to 10% decline in cane supply. However, the fourth and last week of June was marked by a severe frost in the cane-producing regions of the Center-South region, which even affected distant areas such as the south of São Paulo.
As a result, the initial references are that the current crop should have a decline in the volume of cane to be processed of between 10% and 12%, with losses in both cane quality and quantity, even reversing the possible positive effects that the rains of the first three weeks of June could have on the region’s cane fields in the second half of the year.
However, SAFRAS & Mercado warns that the effects of the lowest level of domestic demand in 17 years expected for Brazil for the current 2025/26 season are more intense than the crop failure projected for the Center-South region, which should be exacerbated by the frosts at the end of June. Therefore, even though prices plummeted at the end of June, no recovery is expected in the short term, with the outlook for July indicating that prices will remain depreciated.
SAFRAS & Mercado projects that the month of June will be marked by average profit-taking for a 50-kg bag of crystal with up to Icumsa 150 oscillating at BRL 116/50 kg. Therefore, the expectation is that July will see further declines in the short, medium and long term, as observed in June. A 5.37% low is expected in the margin, and against the annual and 5-year averages, respective declines of 18.30% and 18.00% are expected.
SAFRAS & Mercado warns that the lower prices of crystal sugar on the physical market seen in June and July will lead mills to allocate higher levels of sugar supply to the foreign market, which will reinforce the supply of the same on the international scene, contributing to the reaffirmation of the lower prices that have been seen in New York.
