Sugar prices are rising because Brazil may use more sugarcane for ethanol production.

New York raw sugar futures rose for the second consecutive day as the market speculated that sugar mills in Brazil, the world's largest producer, may use more sugarcane for ethanol production rather than sweeteners. Sugar mills in the country can choose to process sugarcane into sugar or biofuel based on market conditions. Earlier this year, raw sugar futures had fallen by over 20% due to strong supply prospects. Plinio Nastari, president of consultancy Datagro, stated that sugarcane production in the core producing region of central-southern Brazil is expected to increase from the current 607 million tons to 620 million tons in the 2026-27 season. However, he pointed out that sugar production is expected to remain unchanged at the current level of 40.8 million tons due to sugar mills using more sugarcane for ethanol production.