Raízen's Out-of-Court Restructuring Request Raises Concerns Among Sugarcane Suppliers in Brazil
Sugarcane suppliers are expressing concern following Raízen's request for out-of-court debt restructuring, according to the president of Orplana. Brazil's largest sugarcane processor, Raízen, aims to restructure R$65 billion in debt, potentially impacting future relationships with non-contracted suppliers, though progress in negotiations with financial creditors offers some relief.
Raízen, Brazil's largest sugarcane processor, has filed for out-of-court debt restructuring, sparking significant concern among its sugarcane suppliers. José Guilherme Nogueira, president of the Organization of Sugarcane Producers Associations (Orplana), informed Globo Rural that growers supplying Raízen are closely monitoring the company's situation. Controlled by Cosan and Shell, Raízen submitted its restructuring request on Tuesday evening, aiming to reorganize debts totaling R$65 billion (approximately USD 13 billion).
Raízen is a major player in renewable energy, sugar, and ethanol production, as well as fuel distribution, dominating the country's sugarcane processing sector. This harvest season, the company processed 70 million tons of raw material, accounting for over 10% of the total volume from Brazil's Center-South region. It is estimated that third-party suppliers, both contracted and non-contracted, provide roughly half of this volume, though the company has not confirmed this figure. In total, Raízen works with 1,100 sugarcane suppliers.
Nogueira highlighted that suppliers selling sugarcane to Raízen on the physical (spot) market—without long-term contracts—are particularly cautious. They are currently evaluating whether to continue supplying Raízen in the 2026/27 harvest season, which officially begins next April. "Those without contracts are rethinking their relationship with Raízen," Nogueira stated on the sidelines of an event in Ribeirão Preto. Nevertheless, the news that Raízen sought out-of-court restructuring to gain time for negotiating its multi-billion-dollar debt with financial creditors has provided some relief to certain suppliers.