As sugar prices retreat from the record highs of recent years, producers across Brazil and beyond face a pressing challenge: how to protect margins in a falling market. This was the central question discussed by Andre Vieira, our Head of Sugar and Energy Sales for Brazil, during the “Market Intelligence” panel at the 18th National Bioenergy Congress, hosted by UDOP in Araçatuba, Brazil.
The event brought together nearly 2,000 participants from across the bioenergy sector, including agronomy, ESG, logistics, and other related areas. It covered a broad range of technical and market-focused topics relevant to the industry in Brazil. In the panel dedicated to market intelligence and price risk management, Andre joined experts to explore how producers and traders can prepare for and respond to today’s shifting market fundamentals. He focused on the importance of strong risk management strategies and financial discipline as critical tools for resilience in a bearish market.
“Last year’s prices in the sugar market made risk management on the production side relatively simpler,” Andre remarked. “Now the market requires more attention and resources in finding the right hedging solutions to protect margins in a more challenging low-price environment.”
While rising prices in recent years masked weaknesses in some companies’ risk management frameworks, today’s conditions are a stark reminder of the importance of preparedness.
“Companies need to maintain a disciplined approach and follow the risk management policies that have been established,” he added. “That reduces volatility and helps preserve margins in their businesses.”
Andre also highlighted how high-price cycles can sometimes reward a weaker governance, but warned that these benefits are short-lived.
On the high-price cycle from the last few years, companies with lower standards of governance on price risk management ended up benefitting from the upwards move,” he explained. “But they will pay the price now that sugar and ethanol prices are going south. We can’t predict how long the low-price cycle will last, and this can quickly downgrade their credit ratings and highly impact their bankability in the short term.”
The key message from Andre was that resilience in the sugar and ethanol markets requires discipline, structure, and a commitment to long-term strategy over short-term gains.
As the industry continues to navigate volatility, forums like the National Bioenergy Congress provide a critical platform for shared learning and cross-sector collaboration.
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