Rabobank points to progress in sugarcane milling in the Center-South

Rabobank Brasil released its monthly update on the sugarcane market, prepared by Andy Duff, a sector analyst for the commodity. The study shows that by the end of July, the total amount of sugarcane crushed in the Center-South region in the 2025/26 harvest reached 306 million tons, representing more than half of the projected harvest for the cycle. The main projections for the harvest already indicate a total volume below 600 million tons.

According to the survey, results to date point to a relatively low level of Total Recoverable Sugars (TRS) per ton of sugarcane, with a cumulative average 4,6% lower than that recorded in the same period in 2024. On the other hand, the allocation of raw material for sugar production has reached record levels, exceeding 54% in the second half of July. This movement reflects the investment in new crystallization capacity made by mills in recent years.

In the market, physical sugar prices have been stable, while ethanol prices have appreciated, an atypical trend amid the peak of the harvest season. The increase is partly explained by the increase in the mandatory anhydrous ethanol blend in gasoline, which rose from 27% to 30% on August 1st, in addition to the more restricted supply outlook for the biofuel. Rabobank projects that sugarcane ethanol production in 2025/26 will reach 3,5 billion liters, approximately 4 billion liters less than in 2024/25.

For the bank, the biggest focus now is the evolution of gasoline prices. If international energy prices continue to fall and the exchange rate remains stable or shows appreciation of the real against the dollar, there may be room for further reductions in domestic fuel prices.