SAO PAULO, Sept 27 (Reuters) - Sugarcane crushing in

Brazil's center-south is expected to reach 593.2 million metric

tons in 2025/26, a 3.2% drop from the previous season as adverse

weather and fires affect the key producing region, consultancy

StoneX ( SNEX ) said on Friday.

That would represent the second straight season of cane

crushing decline in Brazil's main sugar belt, according to

StoneX ( SNEX ), which estimated a 6.3% fall in 2024/25 after a record

reached in the previous cycle.

"Initial prospects for 2025/26 are still in an uncertain

territory," StoneX ( SNEX ) said in a report, adding that rains would be

"extremely needed" from October as the region has been in a

"severe water deficit" since November 2023.

Brazil, the world's largest sugar supplier by far with 70%

of the export trade, has been facing a historic drought in many

regions, affecting crops like sugarcane. In recent months, fires

raging across the country have further worried producers.

StoneX ( SNEX ) said it expects the harvested area in Brazil's

center-south to decline 1.2% in 2025/26 to 7.61 million hectares

(18.8 million acres), impacted by the recent fires.

As sugar has been more profitable than ethanol, with raw

sugar futures on ICE this week hitting a seven-month high on

concerns about Brazil's dry weather, mills are seen allocating

more sugarcane to production of the sweetener in 2025/26.

StoneX ( SNEX ) estimated that 51% of the sugarcane will be allocated

to sugar in the new season, up from 48.4% in 2024/25.

Sugar production in 2025/26 was estimated at 40.6 million

tons, a 2.5% increase from the previous season although still

below the 42.4 million-ton record registered in 2023/24, the

consultancy said.

Sugarcane-based ethanol production was forecast to hit 24

billion liters, a 7.6% year-on-year drop, while corn-based

ethanol output would grow 12.5% to 9 billion liters.