Sugar futures close higher after Brazil raises gasoline ethanol blend to 32%
AI Market Summary
Brazil's decision to raise the mandatory anhydrous ethanol blend in gasoline to 32% strengthens incentives to divert cane toward ethanol, tightening sugar supply as Center-South mills already allocate more cane to ethanol than sugar. Firm crude oil prices reinforce this linkage. Meanwhile, several forecasters now see the 2026/27 global sugar balance shifting toward deficit amid El Niño risks, outweighing recent improvement in India's monsoon data.
Impact level
● Medium
Affected assets
NCCOSUGAR2USD/USDT+0.74%
AI Insight · NCCOSUGAR2USD/USDTAI Insight
▲ Bullish
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Sugar prices finished higher after Brazil approved an increase in the mandatory blend of anhydrous ethanol in gasoline to 32% from 30%, strengthening incentives to channel more cane into ethanol. WTI crude oil rose more than +1% to a 1month high, adding support by improving ethanol economics. In Brazil’s Center-South, mills have reduced the share of cane used for sugar to 41.42% while lifting the ethanol share to 58.38%. Several forecasters also lowered their 2026/27 global sugar balance outlook, with Czarnikow shifting from a 1.4 MMT surplus to a 100,000 MT deficit.
