April 8, 20260 views0 shares
Brazil's Ethanol Production Expected to Jump 16% This Season Amid Surging Oil Prices
Amid a surge in oil prices, Brazil's ethanol production for the 2026/27 sugarcane season, starting in April, is projected to increase by 16% to approximately 43 billion liters. This boost is primarily driven by the government's decision to raise the ethanol blend in gasoline from 27% to 30%, with potential further increases to 35%.
As global oil prices continue to soar, Brazil's energy landscape is undergoing a significant transformation. According to the latest forecasts from Safras & Mercado consultancy, Brazil's sugarcane harvest for the 2026/27 season, which officially commenced this month, is expected to grow by 3.15%, reaching a total of 677.7 million tons. However, more notably, sugar mills are strategically shifting focus: sugar production is projected to decline by over 7%, while ethanol output (from both sugarcane and corn) is set to skyrocket from the current 37 billion liters to approximately 43 billion liters, marking a substantial 16% increase.
Safras & Mercado attributes this significant boost in ethanol production to an anticipated surge in demand this year. This is a direct consequence of the Brazilian government's decision last August to increase the ethanol blend in gasoline from 27% to 30%. The consultancy further predicts that this blend percentage could potentially rise to 35% by the end of the third quarter of this year, with the government already initiating technical tests to implement this higher proportion.
Industry analysts underscore that Brazil currently leads the world in the proportion of alcohol added to gasoline, a strategy that effectively reduces its reliance on imported gasoline. Maurício Muruci, a sugar and ethanol analyst and consultant at Safras & Mercado, elaborated: “The increase in the ethanol blend in gasoline aims to reduce pollutant emissions and decrease dependence on fossil fuels. The strong possibility of the blend reaching 35% this year, coupled with the higher price of hydrous ethanol compared to sugar, will incentivize mills to boost the supply of both anhydrous and hydrous ethanol in the upcoming season.”