Sugar at an all-time high: market faces an extraordinary scenario in Brazil

The international sugar market is experiencing a unique moment, with historically high prices, although lower than the peaks recorded at the beginning of last year. According to Itaú BBA, a pound of raw sugar is currently trading at US$0.22, a value 30% above the average of the last 12 years. The scenario reflects a mismatch between global supply and demand. While countries such as Brazil and India achieved production close to records in the 2023/24 harvest, other large exporters, such as the European Union, Thailand and Mexico, faced significant drops in their production. Brazil stands out in this context due to its low production costs and the high premium for sugar in relation to ethanol, currently at US$0.07 per pound, far exceeding the historical average of US$0.01. This differential has stimulated investments in new mills and in the expansion of production capacity. Although the current infrastructure limits immediate increases in production, Brazil has the potential to ...