Opinion Focus
Data from UNICA indicate that mills have already started activities for the 2026/27 harvest in the first half of the month. However, the heavy rains in March still hold back the beginning of crushing. The rise in prices at No.11 in the last week boosted pricing.
1st Half of March: Mills Anticipate Start of 2026/27 Harvest in CS Brazil
UNICA published today the production data for the 1st half of March:
According to UNICA, 18 mills were in operation in the first half of March, indicating an anticipation of the start of the harvest in relation to the official April calendar.
Even so, the advance was limited by the rains in the period. The expectation was for 36 mills in operation, but the heavier rainfall in March, with 5 days of stoppages, reduced this number.
For the second half of March, the scenario was different. With a lower volume of precipitation and only one day of stoppage recorded in the CS Brazil, we estimate that a greater number of mills have started their operations.
Weather conditions also remain favourable for the first half of April, a period that marks the official start of the harvest. Based on current rain forecasts, there is no expectation of new days of stoppage so far.
It is worth remembering that, although some mills have already resumed crushing and anticipated the start of the 2026/27 harvest, UNICA will officially count the new harvest only from April. Thus, this advance is still incorporated into the numbers for the 2025/26 harvest.
In the cumulative figure, CZ’s data are in line with UNICA’s estimates, indicating a harvest closure of around 40.3 mmt of sugar, with a mix of 50.47%.
Race to Pricing with Recent Price Hike
The recent recovery in prices, driven by tensions between the United States and Iran, has stimulated a greater pace of hedging by Brazilian producers. We estimate that, so far, about 42.6% of the 2026/27 harvest is already priced in, compared to 33% in the previous week, a big jump for a period of 1 week.
Even so, the levels remain significantly below those observed in recent years, which does not change our view of a more dynamic harvest with a greater focus on ethanol.
Assuming that the barrel of oil remains above USD 100/bbl (with an exchange rate at 5.2, parity at the pump at 65% and a 40% adjustment in gasoline prices by Petrobras), hydrous ethanol at No.11 base could reach around 18¢/lb. In this scenario, the sugar parity could exceed 300 points and reduce the sugar mix significantly.
