Why Brazil’s Sugarcane Shortfall Should Concern Food and Beverage Brands

Andy Paterson • May 19th, 2025.

Brazil typically accounts for 50% of the world’s sugarcane exports. In the U.S., around a quarter of sugarcane imports come from Brazil, playing a huge role as an ingredient in the food and beverage industry.

ClimateAi’s Yield Outlook tool has found that the Brazilian sugarcane crop is highly likely to have a below-average yield in 2025, which could impact price and availability. Considering this and the increased tariffs in 2025, procurement managers will have to know the best times and places to buy for the best prices and to ensure supply continuity. 

This article will look at the sugarcane yield predictions for this year, what that means for food and beverage procurement leaders, the role tariffs might play, and what businesses can do to prepare.

Why Brazil’s Sugarcane Crop Matters

Brazil’s sugarcane crop is the largest in the world. Accounting for around 20% of production and between 40% and 50% of the global export supply every year. 

Given Brazil’s role as the largest producer and global supplier, the country’s yield affects global costs. For example, early reports of a lower yield in Brazil this year caused prices to rise 4%. Global food and beverage companies rely on Brazil’s crop to ensure a stable supply and price. 

While 50% of Brazilian sugarcane is also used to produce ethanol, this blog focuses on its primary role in food and beverage products, where it’s used as a sweetener, texture agent, and preservative across a wide range of global brands.

Two-thirds of Brazil’s world-leading sugarcane harvest comes from just two states. Here is how ClimateAi’s Yield Outlook predicts weather might impact sugarcane yields across those two states this season:

• Heat and drought are driving a very high probability of a below-normal yield in Brazil’s upcoming sugarcane harvest.
• There is a high likelihood of below-average yield in the São Paulo and Minas Gerais regions, which make up 64% of Brazil’s sugarcane crop. 
• Sugarcane is currently in season, so the probability of a reduced yield is very high.
  

Sugarcane in Processed Foods and Beverages: Why Consistency Matters

From carbonated drinks and juices to ketchup, cookies, and cereals, sugarcane plays a critical role in product consistency and consumer taste expectations. 

For many food and beverage companies, cane sugar (vs. beet sugar or high fructose corn syrup) is a brand-standard ingredient due to its superior texture, flavor, or market appeal (e.g., “cane sugar” labels). A sudden price spike or supply constraint, driven by Brazil’s yield drop or import tariffs can trigger costly recipe changes, procurement pivots, and risk the brand recognized flavor.

Why US Procurement Leaders Should Care About Low Yields of Brazil’s Sugarcane

While around half of the U.S. sugar market comes from domestically grown sugar beets and is supplemented by some domestically grown sugarcane, Brazil’s crop makes up a significant amount of the U.S. raw sugar import market (553,190 metric tons valued at around $366.5 million in 2023), which fills the remaining gap. 

Sugar Import Tariffs and Quotas

Sugarcane is a complex import crop for US sourcers. It needs to be processed quickly after it is harvested, which means it has to be exported as a partly processed product, usually as raw sugar. The U.S. also has both a trade quota for sugar products from Brazil and a blanket tariff on all products. However, it is a required crop for many sugarcane-specific and other food and beverage products. 

• Since 1994, the U.S. has had an annually changing tariff-rate quota (TRQ) on sugar imports. For Brazil, the amount is usually set at around 150,000 metric tons. Any imported amount above the TRQ costs an additional $360 per ton, around 80% more, making Brazilian sugarcane less cost-effective after the TRQ is breached. US imports will only exceed the TRQ if demand and domestic costs are high, like in 2023.
  
• Reduced yield plus a new blanket tariff of 10% on all Brazilian goods for both before and after the TRQ will make Brazilian sugarcane even less cost-effective. Meaning, US sugarcane sourcing managers may have to find alternative sources even before the TRQ is reached.
  
• Some of the world’s largest food and beverage companies, like Pepsi and Kellogg’s, rely heavily on Brazil’s sugarcane in their sourcing strategies.

For procurement leaders in the food and beverage industry, understanding the dynamics of Brazilian sugar imports is crucial. Supply chain disruptions, such as reduced yields in Brazil or changes in trade policies, can impact ingredient availability and pricing. Tools like ClimateAi’s Yield Outlook can provide foresight into potential supply challenges, enabling proactive sourcing strategies. 

How ClimateAi Helps Procurement Decision Making

ClimateAi’s Yield Outlook tool forecasts above-normal U.S. sugarcane yields in 2025, particularly across Florida and Louisiana, which together account for over 90% of domestic sugarcane production.

In contrast, Brazil’s sugarcane production is projected to decline, potentially raising global pricing. U.S. sourcing managers for sugar now face a complex year, with a favorable domestic supply, a low yield in one of its largest trading partners, and a volatile tariff environment.

With high yields expected domestically, U.S. sugar prices will likely decline, reducing demand for imports beyond the TRQ. In similar years, such as 2022, when U.S. yields were strong, imports from Brazil hovered just above the base TRQ, totaling 206,193 metric tons. High-tier imports above the TRQ in such years are typically uneconomical, especially when the domestic supply is above normal.

ClimateAi’s climate forecasting allows procurement leaders to anticipate these conditions months ahead of market adjustments, enabling better contracting decision-making before global reactions set in.

Diversify Sugarcane Sourcing

In addition to expanding domestic procurement, sourcing teams should consider diversifying international supply based on both climate exposure and tariff policy:

• Sourcing from Weather-Stable Regions: U.S. sugar imports from two of their other main sugar-importing regions, Mexico and the Dominican Republic, may be less impacted by heat stress or drought. Making them potentially strategic fallback sources.
• Tariff and Trade Considerations:
  • Mexican crops benefit from tariff-less trade under the USMCA, but are still limited by a low TRQ compared to Brazil and some other nations, capping how much can enter without tariffs.
  • The Dominican Republic is subject to the 10% blanket tariff but enjoys the largest TRQ allocation of any country.

With yield and tariff insights from ClimateAi, procurement leaders can make more climate-resilient sourcing decisions, whether by shifting volume domestically, increasing sugar beet or corn syrup procurement, or identifying less climate-exposed international partners.

With a lower yield in Brazil’s sugarcane crop and fluctuating tariffs, the sugarcane market will be complex, and prices will be volatile in 2025. Having the foresight of weather intelligence with ClimateAi’s yield Outlook tool gives businesses and their procurement teams one area where they can have accurate price and supply forecasts to make better decisions.

While we can’t control the weather or tariffs, we can ensure you have the most accurate information on how the weather will affect the crops your company needs. 

Brazil Sugarcane Crop 2025 FAQs