Brazil’s maize deficit may reach 7.2 million tonnes as ethanol demand rises
Datagro expects Brazil’s maize market deficit to widen to 7.2 million tonnes in 2026/27 as ethanol plants consume 32.49 million tonnes. Production growth is forecast to trail total demand, reducing stocks and potentially supporting producer prices.
Ethanol plants drive consumption higher
Brazil’s maize market deficit could increase to 7.2 million tonnes in the 2026/27 cycle from 2.7 million tonnes in the previous season, as expanding ethanol production raises domestic consumption. Reuters reported that consultancy Datagro expects the ethanol industry to use 32.49 million tonnes of maize, an increase of more than 14% year on year.
The forecast highlights the growing influence of maize-based ethanol on Brazil’s grain balance. Datagro analyst Gabriel Bastos said the projected deficit was being driven largely by additional demand from ethanol plants. Brazil currently has 33 operating maize ethanol facilities, and that number is expected to more than double over the next six years when plants under construction and planned projects are included.
Demand growth outpaces production
Datagro maintained its preliminary 2026/27 production forecast at 147.5 million tonnes, up 1.5% from the previous season. Total demand, however, is projected to rise 4.5% to 154.7 million tonnes. Most of the crop will only be harvested in 2027, leaving the outlook exposed to changes in planted area, yields and weather.
Animal feed will remain the largest domestic use, absorbing an estimated 64.2 million tonnes, nearly 4% more than a year earlier. Ethanol will represent another 32.49 million tonnes. Datagro’s total demand estimate also includes seed, human consumption and other industrial applications. The gap between supply growth and consumption growth raises the prospect of stronger competition between fuel producers, livestock supply chains and export buyers.
Stocks fall while exports remain steady
Brazilian maize exports are forecast to remain stable at 45 million tonnes in 2026/27. Brazil has ranked as the world’s second-largest exporter in recent years, behind the United States, and is the third-largest producer after the United States and China. Keeping shipments at that level while domestic consumption expands would require continued use of inventories unless production exceeds the current forecast.
Datagro expects ending stocks, measured on January 31, to fall to 8.9 million tonnes in 2026/27, compared with 16.1 million tonnes recorded in 2024/25. The consultancy said Brazil has already been drawing down maize stocks in recent years. A smaller buffer could make domestic prices more sensitive to harvest disruptions, shifts in ethanol output or unexpected export demand.
Prices may improve amid production risks
Datagro grain head Flávio França Júnior said the tighter market could improve prices paid to farmers. Such support would come as grain producers face narrower margins and more scarce and expensive credit, with some agricultural businesses seeking court-supervised restructuring. Concerns about possible El Niño effects add another source of uncertainty.
The forecast presents a mixed outlook for the supply chain. Higher prices could improve returns for maize growers, but they would increase input costs for livestock producers and ethanol plants. Exporters may also face stronger competition for available grain. The eventual balance will depend on whether production can accelerate beyond the projected 1.5% increase while ethanol capacity and feed consumption continue to expand.
