Brazil: Sugar and Ethanol
São Martinho, a Brazilian sugar and ethanol producer listed in São Paulo, cut its 2026/27 harvest forecasts on Monday, 9 November 2026, after rain hit its sugarcane. The company now expects 10.5% less total recoverable sugar, known as ATR, than it said in May and will steer more of it into ethanol.
Key Facts
•Forecast Total recoverable sugar (ATR), the sugar extractable from cane, is now 3.016 million tonnes, down 10.5%.
•Cause Rain lowered cane quality and cut harvest days, mainly at São Paulo state mills.
•Mix 53% of the ATR goes to ethanol; about 2 million tonnes of cane wait until 2027/28.
•Spending Total capital spending is now about R$2.9 billion (US$526 million), down 1.4%.
•Next The corn ethanol expansion at its Boa Vista mill is still due in the second half of 2027.
One wet harvest has shrunk São Martinho’s sugar output and tilted its product mix toward ethanol fuel.
What the Company Changed
São Martinho (SMTO3 on B3, the São Paulo stock exchange) now expects to produce 3.016 million tonnes of total recoverable sugar, known as ATR, from sugarcane. That is 10.5% below its guidance of 25 May 2026, Safras & Mercado, a Brazilian agribusiness news service, reported on 10 November.
Cane crushing is forecast at 22.8 million tonnes, 3.5% below the earlier estimate. Average ATR per tonne of cane fell 7.3% to 132.2 kilograms.
Why Rain Matters for Sugar and Ethanol
The company said rain during the harvest reduced the cane available for processing and hurt its quality, especially at its São Paulo mills, Safras reported. Exame, a Brazilian business magazine, added that the company also cited fewer days available for harvesting and crushing.
Rain also changed the product mix: 53% of the ATR will go to ethanol, according to the company statement of 9 November. The company will carry about 2 million tonnes of cane over to the 2027/28 harvest, known in Brazil as “cana bisada”, a decision the company tied to the cane fields’ productivity against fewer mill days, according to Exame.
Spending and Corn Ethanol
Total capital spending for the harvest year is now about R$2.9 billion (US$526 million), 1.4% less than before. Maintenance spending falls 2% to about R$1.9 billion (US$345 million), which the company linked to a changed off-season maintenance schedule after the harvest period was extended, according to Exame.
Corn ethanol plans stand at 495,000 tonnes of corn and about 209,000 cubic metres of ethanol. Output of DDGs, a corn by-product used as animal feed, was cut 5.3% to 127,000 tonnes, while corn oil rose 4.3% to 8,000 tonnes.
The second phase of the corn ethanol plant at the company’s Boa Vista mill remains on schedule to start in the second half of 2027. That timetable matches the plan announced in August 2025, Exame reported.
What This Means for Readers
For investors in Brazilian sugar and ethanol, the revision shows how one wet harvest can shrink output and reshuffle the product mix within a single season. With 53% of the ATR going to ethanol, more of the company’s output will be fuel and less will be sugar.
The 2 million tonnes left in the field are expected to be processed in 2027/28, the company said. It also said its projections are subject to weather, operating and market risks, Safras reported.
What Is Not Known
The coverage of the revisions gives volumes and spending but no profit estimate. How much the lower sugar output will cost in revenue depends on sugar and ethanol prices.
Frequently Asked Questions
Why did São Martinho cut its 2026/27 forecast?
Rain during the harvest lowered cane quality and reduced harvest and milling days, especially in São Paulo state. ATR output is now forecast at 3.016 million tonnes, down 10.5%.
What is ATR?
ATR is total recoverable sugar, the amount of sugar that can be extracted from a tonne of cane. It is a main gauge of cane quality.
How much cane will carry over to the next harvest?
About 2 million tonnes of cane will be left for crushing in the 2027/28 harvest, the company said.
Sources
São Martinho, material fact notice (a filing listed companies must make public), 9 November 2026. As reported by Safras & Mercado, 10 November 2026 and Exame, 10 November 2026. Related: São Martinho’s earlier results, Brazil’s sugarcane fuel push, Brazil news.
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