Sugarcane crushing is expected to fall 3,7% in the Center-South in 2025/26

The 2025/26 sugarcane harvest in Brazil's Center-South region is expected to reach 598,8 million tons, a 3,7% decrease compared to the previous season. The report on crop estimates for the region from StoneX, a global financial services company, attributes the decline to drier weather during the crop development period, as well as the impact of wildfires in 2024. In addition to the lower crushing, atypical weather conditions in the first months of the cycle, with above-average rainfall in June and lower monitoring figures, are leading to a downward revision in raw material quality, as measured by Total Recovered Sugar (ATR), which has already accumulated a 4,8% decline through the end of June.

According to StoneX Market Intelligence analyst Rafael Borges, each kilogram less TRS per ton of sugarcane represents significant losses: nearly 300 tons of sugar and over 170 m³ of ethanol. "Excessive rainfall delayed the harvest in June, and lower TRS expectations reduce production potential, even with a mix more heavily weighted toward sugar," he states.

The harvested area in the region was also revised downward and is estimated at 7,86 million hectares—almost 150 fewer than in 2024/25—impacted, among other factors, by areas affected by fires in the previous year. For TCH, a decline of 2,1% is expected, projected at 76,15 t/ha.

According to Borges, sugar production is expected to remain virtually stable, estimated at 40,16 million tons – a slight decrease of about 40 tons compared to the previous harvest. Sugar recovery per ton of cane is expected to fall to 137,2 kg/t (-2,7%), leading to lower sugar production, even with the production mix reaching 51,3%.

For ethanol, the impact of the reduction in ATR is also evident. Total sugarcane production is expected to shrink by 12,4%, with hydrous ethanol production expected to decline by more than 19%, totaling approximately 3,3 billion liters. "The increase in the anhydrous blend in gasoline, from 27,5% to 30%, scheduled for August, will lead to a shift in production toward anhydrous, contributing to the decline in hydrous ethanol's market share," explains Borges.

Production in the Northeast also declines, but corn ethanol gains ground

In the Northeast region, where crushing in the main states runs from September to August, a slight decline is expected in the 2025/26 harvest. The estimate is 57,32 million tons of sugarcane processed, a 0,3% decrease compared to the previous cycle. Sugar production is expected to total 3,63 million tons, a 4,1% decrease.

Despite the reduction, climate data between May and July indicate rainfall within or above average in most producing regions, which helped keep the TCH outlook practically stable compared to the previous cycle, at 60,9 t/ha. The harvested area, on the other hand, will be slightly smaller, a result of crop reforms in the previous harvest and indications gathered from units in the region.

As in the Center-South, the lower ATR impacts total ethanol production. However, the 2025/26 cycle marks a significant advance in the entry of corn ethanol plants in the Northeast. A plant has been operating since March in Balsas, Maranhão, and another large unit, in Luís Eduardo Magalhães, Bahia, is scheduled to start up at the end of the year, with a capacity exceeding 500 m³ per year, in addition to other projects in the region.

"This introduction of corn ethanol can mitigate the effects of lower sugarcane production, especially on hydrous ethanol, whose share of consumption is expected to fall due to higher prices and the increase in anhydrous ethanol in the blend," adds the Market Intelligence analyst.