Sales are advancing and changing the dynamics of the sugar market

The sugarcane and ethanol sector in the Center-South region of Brazil begins the 2026/27 harvest in a more balanced condition compared to recent months, following a significant increase in sugar price fixing by producers. This movement reduces the selling pressure that had been limiting more substantial increases in international prices. This analysis comes from StoneX, a global financial services company. 

After registering a delay of up to 20 percentage points in price fixings compared to the same period of the previous cycle, producers took advantage of the high price window observed in March to accelerate sales. The volume fixed jumped from 41,8% to 59,5%, reducing the shortfall to about 10 percentage points compared to the 68,7% recorded at the end of March 2025. 

The firmer price environment this month was driven by escalating conflicts in the Middle East, which contributed to a reduction in short positions held by speculative agents. At the same time, producers, still lagging behind in fixing prices, took advantage of the liquidity to increase sales. 

In practice, this movement limited a more significant rise in prices, since the additional supply resulting from the price fixing offset some of the buying pressure. Even so, the recovery in the pace of sales alters the market dynamics. 

“The market is now operating in a more balanced condition, with less resistance from the producer side to upward movements,” assesses Nathalia Bruni, Risk Management consultant at StoneX. 

The lag in sugar price fixings by producers in the Center-South region had been acting as an informal ceiling for prices. This delay meant that any upward movements were accompanied by an increase in sales, expanding supply and limiting the sustainability of prices. With the recent recovery in fixings and the reduction of this lag, this obstacle is losing strength and reducing resistance from the producer side to more sustained upward movements. 

"If the fundamentals find a new trigger for an upward movement, the resistance on the producing side tends to be lower than what has been observed previously," he adds.