Key Takeaways
- Tariff whiplash disrupted trade — Brazilian tariffs pushed prices up in August 2025, then again when lifted in November. The market still hasn’t fully normalized.
- Sourcing shifted for speed, not quality — US roasters turned to Central America and Colombia to dodge tariffs quickly, not for better beans. EU buyers shifted to Vietnam, Uganda, and Indonesia.
- Bonded warehouses are skewing the data — Stockpiled Brazilian coffee released after tariffs lifted is delaying the visible pickup in shipment numbers.
- Robusta origins are surging while Brazil and Colombia hold back — Growers are withholding coffee hoping for $4.00/lb, but 35-40% need to sell soon to cover costs.
- No major stock build yet — Anecdotal evidence points to hand-to-mouth consumption, though data remains thin.
Brazilian sugar producers have felt a limited impact on the fertilizer front in terms of price and availability, according to Expana’s Senior Manager of Sugar & Ethanol Analysis, Rodrigo Bermejo.
“We’ve seen a limited impact on fertilizer prices so far,” he said. “There was some limitation which began in April 2026, but now we’re looking more at the impacts to the 2027/28 season. It’s fair to say that if the situation in the Middle East lasts longer, there will be a bigger impact.”
However, stress on the fertilizer supply chain is beginning, according to Bermejo’s contacts. In Brazil, fertilizer demand is spread across the calendar year. Just recently, there have been some delays in supply.
In most cases, fertilizer is applied at planting and then again around three months after, said Bermejo.
“Although there is basically planting and harvesting going on all year long, there is a higher concentration of planting operations from January to May and June,” he said, noting that fertilizer application activity will occur every month, with a higher concentration from January to September.
“The winter season is dry in Center-South Brazil and rainfall resumes usually from October,” said Bermejo. “This is why farmers take advantage of the dry period from May to September to speed up harvesting and avoid planting as the soil is too dry to promote proper germination and initial growth.”
As another added layer of complexity, the El Nino weather pattern has returned, and has begun to effect conditions across the globe. For example, this Winter in Brazil may be wetter than normal due to the El Nino weather pattern that is now coming into effect. However, more research is needed to determine what affect this may have on the Brazilian sugar market.
The Brazilian market works with more than one crop cycle. Some cane is grown on a roughly 12-month schedule, while other volumes are tied to longer cycles, including 18-month cane and Winter cane. In practice, this means planting can occur in several windows.
“Many mills purchase their fertilizers for the entire year during the first few months of the year, so most are well covered for 2026. Next season can be impacted if the conflict lasts longer,” specified Bermejo.
Farmers and producers working in other agri-commodity markets may already be impacted, according to Reuters reporters who posted an article about fertilizer prices and availability muting Brazilian farmers’ competitive advantage over those in the US.
Global Sugar Market
Going into 2026, the global sugar market was soft until the Middle East conflict hiked energy costs. The market moved higher on the thought that Brazilian cane mills would be incentivized to produce ethanol from sugarcane as a substitute for regular gasoline. However, the predicted and would-be logical chain of events did not work out exactly as expected.
“The conflict hiked energy costs and brought expectations of higher domestic gasoline prices in Brazil, which would theoretically incentivize local mills to divert more sucrose toward ethanol production to the detriment of sugar [production],” explained Bermejo.
However, the expectations of higher Brazilian gasoline prices were not met right away. So, even the war’s price support has had a limited impact on prices. For example, nearby contracts for sugar in NY are still down ~15% over the last year to USc 13.92/Lb, according to prices cited on the Expana platform.
On May 28, Brazilian state-run oil company Petrobras said leaders would hike the price of gasoline sold to distributors starting May 29, reported Reuters about a bullish factor for the sugar market.
Everyone watching thought this development would have happened at the onset of war, rather than three months after the fact. Still, higher fuel costs could incentivize higher use of ethanol (made from corn and cane in Brazil).
“While this outcome is marginally more supportive for ethanol prices than our original base case—which assumed a full offset between subsidies and the Petrobras adjustment—we do not expect the announcement to materially affect the broader ethanol price outlook or the sugar market. That said, a more sustained impact could emerge if the subsidy program remains in place for the announced two-month period and Petrobras refrains from reducing prices thereafter, which we consider very unlikely at this stage,” wrote Bermejo to Expana clients.
Previously, on May 13, Brazil’s government officials announced a direct subsidy to gasoline producers and importers, and later to diesel, after a proposal to cut federal fuel taxes stalled in Congress, reported Reuters about a politically motivated move by President Lula during an election year.
On top of it all, ethanol production is up: Both ethanol production from corn and sugarcane are higher year-over-year—minimizing the impact of any increased demand for the biofuel, reported Expana.
Written by Ryan Gallagher
